iAJb(djinyi^cAA/^4truUUA^ 


A  SELECTION  OF  CASES 


ON   THE 


LAW    OF    QUASI-CONTRACTS. 


WILLIAM  A.  KEENER, 

8TOKY    PROFESSOR    OF    LAW    IN    HARVARD    UNIVERSITY. 


VOLUME  L 


New  York  : 
BAKER,  VOORIIIS  &  COMPANY. 

1888. 


-T- 


1 888  a. 

V.I 


Copyright,  1888, 
By  William  A.  Keener. 


PREFACE. 


This  collection  of  cases  deals  in  the  main  with  that  portion  of  the 
law  of  quasi-contracts  depending  on  the  theory  of  unjust  enrichment, 
and  enforceable  at  common  law  by  the  use  of  the  indebitatus  counts. 
While  nnich  that  is  exclusively  of  equitable  cognizance  might  prop- 
erly be  discussed  under  the  title  of  quasi-contracts,  the  fact  that  such 
topics  are  treated  in  other  courses  in  the  School  renders  it  unneces- 
sary to  refer  to  them  in  a  collection  intended  primarily  for  the  use 
of  Harvard  Law  Students. 

That  Quasi-Contracts  has  been  chosen  as  a  title  will  not  be  a 
surprise  to  any  one  familiar  with  the  confusion  existing  in  the  cases 
in  consequence  of  the  indiscriminate  use  of  the  term  "  Implied  Con- 
tract," —  the  term  being  used  not  only  with  reference  to  a  contract 
implied  in  law,  which  is  not  a  contract  at  all,  but  also  with  reference 
to  a  contract  implied  in  fact,  which  is  a  true  contract.  It  is  safe  to 
say  that  the  development  of  this  branch  of  the  law  has  been  much 
retarded  by  a  confusion  of  ideas  consequent  upon  this  confusion  of 
terms. 

The  method  of  teaching  by  cases  has  grown  steadily  in  favor  since 
its  introduction  in  the  Harvard  Law  School,  and  has  almost  univer- 
sally commended  itself  to  those  who  have  examined  it,  or  have  seen  its 
fruits.  As  these  volumes  may,  however,  fall  into  the  hands  of  persons 
not  acquainted  with  the  use  made  of  the  cases,  a  few  words  relating 
thereto  may  not  be  out  of  place.  While  this  method  of  teacliing 
does  not  at  all  proceed  on  the  idea  tliat  Ibc  common  law  is  wanting 
in  jurists,  its  advocates  regard  the  adjudged  cases  as  the  original 
sources  of  our  law,  and  think  that  it  is  better  for  the  student,  under 
proper  advice  and  guidance,  to  extract  from  the  cases  a  principle, 
than  to  accept  the  statement  of  any  jurist,  however  eminent   he 


iV  PKEFACE. 

may  be,  that  a  certain  principle  is  established  by  certain  cases. 
When  the  student  has  by  the  study  of  cases  grasped  a  principle,  it 
has  assumed  to  him  a  concrete  form,  and  he  can  apply  it  because  it 
was  by  studying  it  in  its  application  that  he  has  acquired  his  knowl- 
edo-e.  Under  this  system  the  student  must  look  upon  law  as  a 
science  consisting  of  a  body  of  principles  to  be  found  in  the  adjudged 
cases,  the  cases  being  to  him  what  the  specimen  is  to  the  geologist. 
And  judged  from  this  point  of  view  an  overruled  case  may  be  of  as 
much  importance  as  a  decision  that  has  never  been  questioned.  For 
example,  the  case  of  Moses  v.  Macferlan,  2  Burr.  1002,  is  generally 
regarded  as  overruled.  Yet  no  opinion  in  which  the  count  for 
money  had  and  received  is  discussed,  is  so  often  referred  to  as  the 
opinion  of  Lord  Mansfield  in  that  case.  And  no  student  can  aftbrd 
to  ignore  the  case. 

A  system  in  which  principles  are  studied  in  their  application  to 
facts  would  seem  to  combine  in  the  highest  possible  degree  the  theo- 
retical and  practical.  In  no  other  way  can  a  student  so  thoroughly 
acquaint  himself  with  the  methods  used  by  judges  in  applying  prin- 
ciples of  law  to  the  facts  before  them.  It  must  be  borne  in  mind 
that  this  method  of  teaching  does  not  consist  in  lectures  by  the  in- 
structor, with  references  to  the  cases  in  support  of  the  propositions 
stated  by  him.  The  exercises  in  the  lecture-room  consist  in  a  state- 
ment and  discussion  by  the  students  of  the  cases  studied  by  them  in 
advance.  This  discussion  is  uuder  the  direction  of  the  instructor, 
who  makes  such  suggestions  and  expresses  such  opinions  as  seem 
necessary.  The  student  is  required  to  analyze  each  case,  discrimi- 
nating between  the  relevant  and  irrelevant,  between  the  actual  and 
possible  grounds  of  flecision.  And  having  thus  discussed  a  case,  he  is 
prepared  and  required  to  deal  with  it  in  its  relation  to  other  cases. 
In  other  words,  the  student  is  practically  doing  as  a  student  what  he 
will  be  constantly  doing  as  a  lawyer.  By  this  metliod  the  student's 
reasoning  powers  are  constantly  developed,  and  while  he  is  gaining 
the  power  of  legal  analysis  and  synthesis,  he  is  also  gaining  the 
other  object  of  legal  education,  namely,  a  knowledge  of  what  the 
law  actually  is, 

A  word  as  to  text-books.  An  inspection  of  the  books  on  the 
shelves  of  the  library  will  show  how  erroneous  is  the  idea  that  text- 
books have  been  banished  from  the  School.     The  instructors  not  onlv 


PEEFACE.  V 

endeavor  to  acquaint  the  students  with  the  relative  merits  of  the 
various  authors,  but  also  make  such  references  to  text-books  during 
the  course  of  the  lecture  as  may  be  necessary. 

As  the  printing  of  head-notes  would  be  inconsistent  with  this 
system  of  teaching,  they  liave  been  omitted.  To  keep  the  book 
within  the  proper  limits  as  to  size  and  cost,  it  has  been  necessary 
to  omit  as  a  rule  the  arguments  of  counsel.  An  index  at  the  end 
of  the  second  volume  will,  it  is  hoped,  render  the  book  somewhat 
useful  to  the  practising  lawyer. 

The  Editor  reserves  for  a  treatise  on  the  law  of  Quasi-Contracts 
what  might  otherwise  appear  in  a  summary. 


WILLIAM  A.    KEENER. 
Cambridge,  Oct.  1,  1888. 


CONTENTS   OF   YOL.    I. 


CHAPTER  I. 

NATURE   OF  THE  OBLIGATION. 


SECTIOX  I. 

Page 
Wherein  it  diffeks  from  Contract ,    .     ,     .        1 


SECTION    XL 
Wherein  it  differs  from  Tort .-,.,,      29 


CHAPTER    n. 

FAILURE    OF  CONSIDERATION. 
SECTION   I. 

]\riSTAKE ,      ,  69 

a.  IMistake  may  be  as  to  Law  or  Fact ,     .     .  69 

b.  Mistake  may  be  as  to  the  Creation  of  a  Contract 182 

c.  Mistake  may  be  as  to  the  Validity  or  Amount  of  a  Claim 212 

d.  A  Claim  may  be  paid  under  a  Mistake  as  to  a  Collateral  Fact      .     .     ,  304 

e.  Mistake  may  be  as  to  Title  of  Vendor 337 

/.   Mistake  may  be  as  to  the  Existence  or  Identity  of  the  Subject-]\Latter 

of  Sale 390 

g.    There   must   be   an   unjust   Enrichment   of    Defendant  at  Plaintiff's 

Expense 403 

h.    Wlien  a  Demand  is  necessary 410 

i.    Plaintiff's  Negligence  no  Bar  to  a  Recovery 42S 

j.    Defence  of  Purchase  for  Value .     .     .  43,5 

k.    Effect  of  Defendant's  Change  of  Position .  451 

SECTION  n. 

Failure  of  Defendant  to  perform  Contract      .......  482 

a.    Defendant  relying  on  Statute  of  Frauds 482 

&.   Performance  impossible 515 


TABLE   OF   CASES. 


Page 

Adamson,  Ex  parte  37 

Aiken  v.  Short  305 

Anglo-Egyptian    Navigation   Co.  v. 

Rennie  532 

Appleton  Bank  v.  McGilvray  430 

Arnold  v.  R.  &  B.  Co.  164 

Attorney-General  v.  Perry  435 

Bank  of  Commerce  v.  Union  Bank      230 

Bank  of  England  v.  Tomkins  399 

Bilbie  v.  Lumley  77 

Billings  V.  Monmouth  209 

Bingham  v.  Bingham  73 

Bize  V.  Dickason  75 

Bond  V.  Aitkin  199 

Bonnel  v.  Fouke  70 

Boylston  Bank  v.  Richardson  317 

Bree  v.  Holbech  390 

Brisbane  v.  Dacrea  79 

Buel  V.  Boughton  411 

Canal  Bank  v.  Bank  of  Albany  231 

Carnac,  In  re  109 

Carpenter  v.  Northborough  Bank  260 

Chambers  v.  Miller  308 

Chatfield  v.  Paxton  77  note 

Claflin  V.  Godfrey  131 

Clare  v.  Lamb  379 

Clarke  v.  Butcher  114 

Cochram  v.  Welby  5 

Cocks  V.  Masterman  224 

Collie,  In  re  37 
Commerce,  Bank  of,  v.  Union  Bank     2.36 

Condon,  In  re  106 

Cooper  V.  Phibbs  96 
Corn  Exchange  Bank  v.  Nassau  Bank  270 

Cripps  V.  Reade  337 

Culbreath  v.  Culbreath  153 


Day  V.  R.  R.  Co. 


603 


Page 

Deery  v.  Hamilton  204 

De  Halm  v.  Hartley  273 

De  Silvale  v.  Kendall  515 

Dibbs  V.  Goren  95 

Dix  V.  Marcy  509 

Dowling  i;.  McKenney  513 

Durrant  v.  Commissioners  462 

Eichholz  V.  Bannister  368 

England,  Bank  of,  v.  Tomkins  399 

Farmer  v.  Arundel  73 

Feise  v.  Parkinson  187 

First  Baptist  Church  v.  Caughey  205 
First  National  Bank  v.  Mastin  Bank    302 

Franklin  Bank  v.  Raymond  407 

Freeman  v.  Jeffries  416 

Goddard  v.  Merchants'  Bank  239 

Gompertz  v.  Bartlett  401 

Gray  v.  Hill  483 

Greer  v.  Greer  489 

Griggs  V.  Austin  537 

Gurney  v.  Womersley  363 

Hambly  v.  Trott  30 

Harris  v.  Loyd  304 

Haven  v.  Foster  123 

Hawley  r.  Moody  401 

Hemphill  v.  Moody  107 

Hewer  v.  Bartholomew  69 

Higgs  V.  Scott  195 

Hirst  V.  Tolson  521 

Hitchcock  V.  Giddings  397 

Hodsden  t;.  Harridge  2 

Hoffman  v.  Bank  of  Milwaukee  249 

HoUis  V.  Edwards  482 

Hubbard  v.  Hickman  413 

Irving  V.  Richardson  289 


TABM   OF   CASES. 


Jackson  v.  McKnight 
James,  Ex  parte 
Johnson  v.  Jo)inson 
Jones  V.  Ryde 

Kelley  v.  Lindsey 
Kelly  V.  Solari 
Kilgour  i:  Finlyson 
Kingston  Bank  v.  Eltinge 
Kiiowlcs  V.  Eovill 
Knowlman  v.  Bluett 

Lansdowne  v.  Lansdowne 
Leather  v.  Simpson 
Livesey  v.  Livesey 
London  v.  Goree 
Louisiana  v.  New  Orleans 

McArthur  v.  Luce 
McCarthy  v.  Decaix 
McCuUocli  V.  Assurance  Co. 
McKIeroy  v.  Southern  Bank 
Malcolm  v.  FuUarton 
Martin  v.  Sitwell 
Mayer  v.  New  York 
Merchants'  Ins.  Co.  v.  Abbott 
Merchants'  National  Bank  v.  Eagle 

Bank 
Merchants'  National  Bank  v.  National 

Bank 
Milford  V.  Commonwealth 
Mills  V.  Alderbury  Union 
Milnes  v.  Duncan 
Morley  v.  Attenborough 
Munt  V.  Stokes 

National  Bank  v.  Bungs 
Newall  V.  Tomlinson 
Northrop  v.  Graves 

Parker  v.  Tainter 
People  I'.  Gibbs 
People  V.  Speir 
Ferklnson  v.  Gilford 
Phillips  I'.  Homfray 
Pitcher  V.  Turin  Co. 
Piatt  V.  Bromage 


Pace 
415 
106 
838 
893 

202 
428 
183 
463 
523 
484 

72 
226 

88 

4 

23 

434 
91 

188 
246 
287 
182 
283 
443 

312 

329 
27 
278 
275 
347 
403 

256 
458 
145 

511 
65 
17 
29 
43 
162 
405 


PAflE 

Pooiey  V.  Brown 

454 

Powell  V.  Rees 

35 

Price  V.  Neal 

212 

Pulbrook  V.  Lawes 

485 

Ray  V.  Bank  of  Kentucky 

141 

Rogers  v.  Walsh 

178 

Sceva  V.  True 

10 

Sharkey  v.  Mansfield 

424 

Shove  V.  Webb 

392 

Simmonds,  Ex  parte 

109 

Smith  V.  Mercer 

214 

Smith  V.  Smith 

494 

Smout  V.  Ilbery 

190 

Southwick  V.  Bank  of  Memphis 

819 

Speake  v.  Richards 

1 

Standish  v.  Ross 

451 

Stanley  Co.  v.  Bailey 

432 

Steamship  Co.  v.  Joliffe 

6 

Strickland  ;;.  Turner 

356 

Stuart  V.  Sears 

300 

Sturgis  V.  Preston 

426 

Talbot  V.  National  Bank 

285 

Taylor  v.  Hare 

185 

Townsend  v.  Crowdy 

291 

Turner  v.  Turner 

71 

Union  National  Bank  v    Sixth 

Na- 

tional  Bank  473 

Van  Deusen  i-.  Blum  197 

Waples  V.  United  States  179 

Webb  I'.  Alexandria  172 

Welch  V.  Goodwin  264 

Wlieadon  v.  Olds  2U8 

Whincup  V.  Hughes  527 
White  V.  Continental  National  Bank    476 

White  V.  National  Bank  387 

Wilkinson  v.  Johnston  220 

Williams  v.  Bemis  600 

Wood  V.  Sheldon  383 

Wright  V.  Newton  520 

Young  V.  Cole  344 

Youmans  v  Edgerton  439 


CASES   ON   QUASI-CONTEACTS. 


CHAPTER    I. 

NATURE  OF  THE  OBLIGATION. 


SECTION  I. 

WHEREIN    IT   DIFFERS    FROM    CONTRACT. 


SPEAKE  V.   RICHARDS. 
In  the  Common  Pleas,  Trinity  Term,  1618. 

[Repoi-ted  in  Hobart,  206.] 

Hugh  Speake  brought  an  action  of  debt,  of  five  hundred  and  twenty* 
three  pounds  and  seventeen  shillings,  against  Edward  Richards,  late  high 
sheriff  of  the  county  of  Southampton,  and  declared  that  one  Paramour  and 
others  were  bound  by  recognizance  in  chancery  in  two  thousand  pounds  to 
the  plaintiff,  and  that  after  other  process  and  judgment,  10  Julii  14  Jac, 
the  plaintiff  sued  a  levari  fac.  to  the  defendant,  returnable  15  Mich.,  which 
was  delivered  Aug,  1,  whereupon  the  defendant  levied  the  sum,  and  at  the 
day  returned  that  he  had  levied  the  same  sum,  qiios  paratos  habeo,  and  yet 
did  not  deliver  it  in  court ;  per  quod,  &c.  The  defendant,  quoad  308, 
pleaded  nihil  debet,  whereupon  the  plaintiff  took  issue ;  and  as  to  the  rest 
he  pleads,  that  after  the  issuing  of  the  writ,  and  before  the  return,  scU. 
Aug.  31,  he  did  pay  unto  the  plaintiff  the  same  sum,  whereupon  the  plain- 
tiff, by  his  acquittance,  the  same  day,  reciting  that  he  had  received  it,  did 
acquit  him  of  it ;   whereupon  the  plaintiff  demurred  in  law. 

The  first  question  ^  in  this  case  was,  whether  the  action  of  debt  would 
lie,  because  there  was  no  contract  between  the  plaintiff  and  the  sheriff. 
But  that  was  resolved  by  the  court  that  it  would  lie  ;  for  though  there 
were  no  actual  contract  yet  there  was  a  kind  of  contract  in  law,  so  it  is  ex 
quasi  contractu.  And  therefore  upon  damages  recovered  in  an  action  of 
trespass,  the  plaintiff  shall  have  an  action  of  debt ;  and  by  the  same  reason 
when  the  money  is  levied  by  the  sheriff,  so  as  the  action  ceased  against  the 
defendant,  the  same  action  is  ipso  facto  by  law  transferred  to  the  sheriff, 

C  ^  Only  80  much  of  the  case  is  given  as  relates  to  this  question.  —  Ed. 

1 


,  HODSDEN  V.    HAEEIDGE.  [cHAP.  I. 

",  ■  1.  tl,  the  judgment  to  male  it  a  debt,  as  before,  and  the  levy  to 
having  both  tl.e  juo^mc  of  a  ta  y  dehvered  to 

„ake  hhn  answerable;  bke  ™'°  '^^^^JJ^^^.^..^  ^e  is  ide  a  debtor. 
t,ec„sto.ner.assoo„as.oneycon>.  .nto^h  ^^^  ^^^^^^^  ^^  ^^_^ 

pS  :  b  d«  of  aL».aW,  by  him.  Debt  lies  by  corpora- 
To  sfor  the  pe^lties  forfeited  npon  their  laws;  so  tor  amercaments  m 
tons  toi  tne  p  ^       ^  ,„,3s  forfeiture,  upon  a  cus- 

;  r^pr  l^el  •  "d^34  H.  6.  36.  .  9^E.  4.  50      It  is  hoMen  t.at 
r„  such  levies  by  the  sheriff  appearing  upon  record,  the  cour^  rnay  award 
r2n  U  or  the'party  may  have  .fieri  fac.  or  elegU  aga.nst    he_^sher.ff. 
to  levy  as  much  of  his  own:  see  Mich.  8  H.  8.  Reports,  Crooke  18/.  ON. 
n  the  exchequer  makes  the  sheriff  debtor  to  the  king,  and  the  debtor  hun- 
self  debtor  to  the  sheriff;  and  though  an  action  of  account  will  lie  properly 
in  this  case,  yet  the  same  case  will  many  times  bear  both  actions,  though 
the  money  be  received  per  anter  mains,  or  the  like.     But  then  the  action 
of  account  is  necessary,  when  the  first  receipt  ah  initio  was  directed  to  a 
merchandizing,  which  makes  uncertainty  of  the  neat  remain  till  account 
finished-  or  where  a  man  is  charged  as  bailiff  of  a  manor,  or  the  like, 
whereupon  the  certainty  of  his  receipt  appears  not  till  account.     Yet  eveu 
in  the  case  of  merchandizing  an  action  of  debt  will  lie  for  the  sum  received 
before  the  merchandize,  yea  and  after  the  merchandize,  for  so  much  as  he 
hath  not  so  employed  ;  and  therefore  if  I  deliver  an  hundred  pounds  to  one, 
to  buy  cattle,  and  he  bestow  fifty  pounds  of  it  in  cattle,  and  I  bring  an  ac- 
tion of  debt  for  all,  I  shall  be  barred  in  that  action  for  the  money  bestowed, 
and  charges,  &c. ;  but  for  the  rest  I  shall  recover. 


HODSDEN  V.  HARRIBGE. 
In  the  King's  Bench,  Hilary  Term,  1670. 

[Rejwrted  in  2  Saunders,  64.] 

Debt  on  an  award  by  Hodsden  against  Harridge  ;  the  plaintiff  declares, 
that  there  were  divers  disputes  and  controversies  between  the  plaintiff  and 
defendant,  concerning  certain  monies  due  to  the  plaintiff  for  malt  sold  and 
delivered  by  him  to  the  defendant,  and  for  quieting  those  controversies,  the 
plaintiff  and  defendant,  on  the  24th  day  of  October,  in  the  13th  year  of  the 
reign  of  the  now  king,  submitted  themselves  to  the  award  of  two  arbitrators, 
and  if  they  should  not  agree  by  a  certain  day,  then  to  the  umpirage  of  an 
umpire  to  be  chosen  by  the  arbitrators,  so  as  the  umpirage  shovild  be  under 
the  hand  and  seal  of  the  umpire  before  another  certain  day ;  and  the  plain- 
tiff avers  that  the  arbitrators  made  no  award,  but  chose  one  Weekes  to  be 
umpire  who  within  the  time  made  an  umpirage  under  his  hand  and  seal, 


SECT.  I.]  HODSDEN   V.    HARRIDGE.  3 

and  thereby  awarded  the  defendant  to  pay  the  plaintiff  15/.  in  full  satisfac- 
tion of  all  debts,  accounts  and  demands  due  to  the  plaintiff:  and  for  the  non- 
payment of  the  said  15L  the  plaintiff  brings  his  action,  &c.  The  defendant 
pleads  in  bar  the  statute  of  limitations,  and  that  the  cause  of  action  did  not 
accrue  within  six  years  next  before  the  exhibiting  of  the  bill ;  and  this,  &c., 
therefore,  &c.,  upon  which  it  was  demurred  in  law.  And  the  question  was, 
whether  this  action  of  debt  on  award  be  within  the  statute  of  21  Jac.  1.  c. 
1  6.  of  limitations  or  not  ] 

And  it  was  argued  by  Saunders  for  the  plaintiff,  in  Trinity  term  last  past, 
that  it  was  not  within  the  statute ;  for  the  words  of  the  statute  are,  "  all 
actions  of  debt  grounded  upon  any  lending  or  contract  without  specialty, 
and  all  actions  of  arrearages  of  rent  "  shall  be  sued  within  six  years,  &c. 
And  he  argued  in  the  first  place,  that  it  was  a  specialty.^     Then  it  was 
argued  upon  the  second  point,  that  admitting  there  was  no  specialty  at  all, 
yet  an  action  of  debt  on  an  award  was  not  limited  by  the  statute,  for  the 
words  being  as  before,  "  all  actions  of  debt  grounded  upon  any  lending  or 
contract  without  specialty,  &o."  therefore  all  actions  of  debt  without  spe- 
cialty generally  are  not  limited,  but  only  all  actions  of  debt  without  spe- 
cialty which  are  grounded  upon  any  lending  or  contract;  and  here  this 
action  of  debt  is  not  founded  upon  any  lending,  and  therefore  it  is  not 
limited,  though  it  be  without  specialty.     And  as  to  the  objection  on  the 
other  side,  that  in  the  present  case  the  law  raises  a  contract,  as,  on  a  judg- 
ment or  recovery  in  trespass  or  trover,  the  law  gives  an  action  of  debt  as 
upon  a  contract  raised  by  law,  and  therefore  this  case  is  within  the  express 
letter  of  the  statute,  being  a  debt  grounded  on  a  contract  raised  by  law,  it 
was  answered,  that  all  actions  of  debt  whatsoever  are  founded  upon  a  con- 
tract raised  either  in  fact  or  by  construction  of  law,  and  by  such  an  expo- 
sition all  actions  of  debt  without  specialty  generally  will  be  limited  by  the 
statute,  which  without  question  was  not  the  true  meaning  of  it  ;  for  if  it 
had  been  so,  the  words  "grounded  upon  any  lending  or  contract"  had  been 
needless  and  superfluous  :   but  the  statute  intends  to  restrain  and  limit 
those  actions  only  which  were  founded  upon  any  lending  or  contract  in  fact, 
as  appears  by  the  words ;  and  the  word  lending  explains  the  word  contract 
to  be  of  the  same  nature.     And  in  the  present  case,  the  action  of  debt  is 
not  founded  upon  any  lending  or  contract,  but   it  is  a  debt  ex  quasi  con- 
tractu, as  the  civilians  term  it,  for  which  the  law  gives  an  action  of  debt, 
although  there  is  no  contract  between  the  parties  :  so  it  is  of  a  recovery  in 
trover  or  trespass  in  the  county  court,  or  court  baron;  and  the  case  of  debt 
for  an  amerciament  in  a  court  baron,  and  so  in  11  H.  7.  debt  for  3/.  for  a 
pound  breach  by  the  custom  of  the  manor,  are  all  of  them  actions  of  debt 
without  specialty,  because  the  defendant  may  wage  his  law  against  them, 
and  yet  they  are  not  founded  upon  any  lending  or  contract  between   the 
parties ;  and  in   the  two  last   ;ases  the  debt  is  no  contract,  but  is  rather 
*  So  much  of  the  argument  as  relates  to  tliis  question  has  been  omitted.  —  Ed. 


4  THE  CITY  OF  LONDON  V.   GOREE.         [CHAP.  I. 

debittm  ex  delicto ;  and  because  those  actions  so  rarely  occur,  and  the  ac- 
tions of  debt  founded  upon  express  contracts  between  men  without  spe- 
ciiilt\'  are  so  frequent  every  day,  the  statute  intends  to  restrain  and  limit 
the  last  mentioned  actions,  without  having  any  regard  to  the  others  on 
account  of  the  paucity  of  them,  from  the  uon-limitation  of  which  the 
makers  of  the  statute  did  not  find  any  such  inconvenience  as  they  found  in 
the  non-limitation  of  actions  of  debt  founded  upon  contracts  in  fact ;  et  ad 
en  qnce  frequeiitius  a-cciduntjiira  adaptantur,  as  is  said  in  Sherwin  and  Cart- 
nriffht's  case,*  where  it  is  adjudged  that  an  action  de  rationabili  parte  bono- 
rum,  although  in  its  nature  it  is  only  an  action  of  detinue,  which  is 
expressly  limited  by  the  statute,  yet  it  was  not  within  the  statute  of 
limitations,  because  it  was  an  action  which  seldom  happens ;  and  therefore 
it  was  concluded,  that  this  action  was  not  within  the  statute  of  limitations. 
Jones  for  the  defendant  argued,  that  it  was  within  the  statute,  and 
strongly  enforced  the  two  objections  before  mentioned ;  but  after  it  had 
been  twice  argued  in  Trinity  term,  the  whole  court  resolved  for  the  plain- 
tiff. Kelynge,  Chief  Justice,  principally  for  the  first  point,  that  there  was 
a  sufficient  specialty  to  prevent  the  statute  of  limitations ;  and  Twysden, 
Justice,  principally  for  the  second  point,  that  this  action  was  not  within  the 
limitation  of  the  statute  at  all,  because  it  was  not  founded  upon  any  lend- 
ing or  contract ;  the  other  judges  consenting  to  both  points ;  wherefore  a 
rule  was  given  for  judgment  for  the  plaintiff,  unless  cause,  &c.  ;  but  on  the 
day  of  shewing  cause,  Jones  moved,  that  the  demurrer  might  be  waived, 
and  the  defendant  be  permitted  to  plead  the  general  issue;  and  because 
Saunders  would  not  consent,  it  was  adjourned  over  to  Michaelmas  term, 
and  hung  until  this  term ;  and  it  being  now  in  the  paper  of  causes,  it  was 
moved  again  for  judgment  for  the  plaintiff;  and  Jones  would  have  spoken 
to  it,  but  TwYSDEN,  Justice,  said,  that  it  was  resolved  by  the  coiut,  in  Trin- 
ity term  before,  for  the  plaintiff  on  both  points  ;  wherefoi-e,  in  the  absence 
of  Kelynge,  he  gave  a  rule  for  judgment,  and  the  plaintiff  had  his  judg- 
ment accordingly ;  whereupon  the  defendant  brought  a  writ  of  error,  but 
was  afterwards  nonsuited,  as  I  was  informed. 


THE   CITY   OF  LONDON   v.   GOEEE. 

In  the  King's  Bench,  Trinity  Term,  1677. 

[Reported  in  1  Ventris,  298.] 

An  indebitatus  assumpsit  was  brought  for  the  duty  of  Scavage,  and  de- 
clared upon  the  Custom  of  London,  that  every  one  which  exposes  foreign 
goods  to  sale  which  had  been  entred  in  the  Custom-house,  shall  pay  so 

1  Hutt.  109. 


SECT.  I.]  COCKRAM,   EXECUTOR,   V.   WELBY.  5 

much  for  shewing  of  them :  after  verdict  it  was  alledged  in  arrest  of  judg- 
ment, that  no  assumpsit  lay  for  such  a  duty,  for  there  ought  to  be  a  con- 
tract, express  or  implied,  to  maintain  an  assumpsit. 

Again,  forasmuch  as  the  customs  of  the  City  are  confirmed  by  Parliament, 
this  is  a  duty  by  record  :  sed  non  allocatur ;  for  there  are  multitudes  of 
precedents  in  such  like  cases.  An  assumpsit  lies  upon  a  bill  of  exchange 
accepted  ;  an  assignee  of  commissioners  of  bankrupt  may  bring  an  assump- 
sit, and  yet  the  debt  is  assigned  by  virtue  of  an  Act  of  Parliament.  And 
the  Court  said,  in  such  case  as  this  the  declaration  might  be  upon  an  in- 
debitatus assumpsit,  as  it  was  in  the  case  at  bar. 


COCKRAM,   EXECUTOR,   v.   WELBY. 
In  the  Common  Pleas,  Easter  Term,  1678. 

[Reported  in  2  Modem,  212.] 

In  debt,  the  plaintiff  declared  that  his  testator  recovered  a  judgment  in 
this  court,  upon  which  he  sued  out  a  fieri  facias,  w'hich  he  delivered  to  the 
defendant,  being  sheriff  of  Lincoln  ;  and  thereupon  the  said  sheriff  returned 
fieri  feci,  but  that  he  hath  not  paid  the  money  to  the  plaintiff,  per  quod 
actio  accrevit,  &c.  The  defendant  pleaded  the  statute  of  limitations.  To 
which  the  plaintiff  demurred. 

The  question  was,  whether  this  action  was  barely  grounded  on  the  con- 
tract, or  whether  it  had  a  foundation  upon  matter  of  record  ]  If  on  the 
contract  only,  then  the  statute  of  21.  Jac.  1,  c.  16.  is  a  good  plea  to  bar 
the  plaintiff  of  his  action,  which  enacts,  "  that  all  actions  of  debt  grounded 
upon  any  lending  or  contract  without  specialty,  shall  be  brought  withiu 
six  years  next  after  the  cause  of  action  doth  accrue;"  and  in  this  case  nine 
years  had  passed.  But  if  it  be  grounded  upon  matter  of  record,  that  is  a 
specialty,  and  then  the  statute  is  no  bar. 

Barrel,  Serjeant,  held  this  to  be  a  debt  upon  a  contract  without  special- 
ty J  for  when  the  sheriff  had  levied  the  money,  the  action  ceases  against 
the  party,  and  then  the  law  creates  a  contract,  and  makes  him  debtor,  as 
it  is  in  the  case  of  a  tally  delivered  to  a  customer.  It  lies  against  an  exec- 
utor, where  the  action  arises  quasi  ex  contractit,  which  it  would  not  do  if  it 
did  not  arise  ex  maleficio,  as  in  the  case  of  a  devastavit.  It  is  true,  the 
judgment  recovered  by  the  testator  is  now  set  forth  by  the  plaintiff's  exec- 
utor ;  but  that  is  not  the  ground  but  only  an  inducement  to  the  action, 
for  the  plaintiff  could  not  have  pleaded  *^nul  tiel  record  ;^^  so  that  it  is  the 
mere  receiving  the  money  which  charges  the  defendant,  and  not  virtute 
officii  upon  a  false  return ;  for  upon  the  receipt  of  the  money  he  is  become 
debtor,  whether  the  writ  be  returned  or  not,   and  the  law   immediately 


6  STEAMSHIP   COMPANY   V.   JOLIFFE.  [CHAP.  I. 

creates  a  contract ;  and  contracts  in  law  are  as  much  within  the  statute  as 
actual  contracts  made  between  the  parties. 

All  this  was  admitted  on  the  other  side;  but  it  was  said,  that  this  con- 
tract in  law  was  chiefly  grounded  upon  the  record  ;  and  compared  it  to  the 
case  of  attornies  fees,  which  hath  been  adjudged  not  to  be  within  the  stat- 
ute, though  it  be  quasi  ex  contractu,  because  it  depends  upon  matter  of 
record,     i.  Roll.  Abr.  598.  pi.  17. 

And  afterwards,  in  Michaelmas  Term  following,  by  the  opinion  of  North, 
Chief  Justice,  Wyndham  and  Atkins,  Justices,  it  was  held,  that  this  case 
was  not  within  the  statute,  because  the  action  was  brought  against  the 
defendant  as  an  officer  who  acted  by  virtue  of  an  execution,  in  which  case 
the  law  did  create  no  contract ;  and  that  here  was  a  wrong  done,  for  which 
the  plaintiff  had  taken  a  proper  remedy  and  therefore  should  not  be 
barred  by  this  statute. 

ScROGGS,  Justice,  was  of  a  contrary  opinion ;  for,  he  said,  if  another  re- 
ceived money  to  his  use  due  upon  bond  the  receipt  makes  the  party  sub- 
ject to  the  action,  and  so  is  within  the  statute. 

But  by  the  opinions  of  the  other  Justices  judgment  was  given  for  the 
plaintiff. 


STEAMSHIP   COMPANY  v.   JOLIFFE. 

In  the  Supreme  Court  of  the  United  States.    December,  1864. 

[Reported  in  2  Wallace,  450.] 

Messrs.  Cope,  Yale,  and  Carlisle,  for  the  defendant  in  error. 

Mr.  McCullough  for  the  State  of  California. 

Mr.  Justice  Field  delivered  the  opinion  of  the  court.^ 

This  case  arises  upon  the  act  of  the  State  of  California,  of  the  20th  of 
May,  1861,  entitled  "An  act  to  establish  pilots  and  pilot  regulations  for 
the  port  of  San  Francisco."  The  act  provides  for  the  creation  of  a  Board 
of  Pilot  Commissioners,  and  authorizes  the  board  to  license  such  number  of 
pilots  for  the  port  as  it  may  deem  necessary,  and  prescribes  their  qualifica- 
tions, duties,  and  compensation.  It  makes  it  a  misdemeanor,  punishable 
by  fine  or  imprisonment,  for  any  person  not  having  a  license  from  the 
board,  to  pilot  any  ship  or  vessel  in  or  out  of  the  port  by  way  of  the 
"  Heads,"  that  is,  by  the  way  which  leads  directly  to  and  from  the  ocean. 
It  enacts  that  "  all  vessels,  their  tackle,  apparel,  and  furniture,  and  the 
masters  and  the  owners  thereof,  shall  be  jointly  and  severally  liable  for 
pilotage  fees,  to  be  recovered  in  any  court  of  competent  jusisdiction."  And 
it  declares,  that  when  a  vessel  is  spoken  by  a  pilot  and  his  services  are  de- 

1  The  facts  being  sufficiently  stated  in  the  ophiion  of  the  Court,  the  statement  of 
facts  has  been  omitted.  —  Ed. 


SECT.  I.]  STEAMSHIP   COMPANY   V.   JOLIFFE.  7 

clined,  he  shall  be  entitled  to  one-half  pilotage  fees,  except  when  the  vessel 
is  in  tow  of  a  steam-tug  outward  bound,  in  which  case  no  charge  shall  be 
made,  unless  a  pilot  be  actually  employed. 

On  the  1st  of  November,  1861,  the  plaintiff  in  the  court  below,  the  de- 
fendant in  error  in  this  court,  was  a  pilot  for  the  port  of  San  Francisco 
having  been  regularly  appointed  and  licensed  by  the  board  created  under 
the  act  of  the  State.  At  that  time  the  steamship  Golden  Gate  was  lying 
in  the  port,  and  about  to  proceed  to  Panama,  carrying  passengers  and 
treasure.  This  vessel  was  then,  and  ever  since  1852  had  been,  an  Ameri- 
can ocean  steamer,  registered  at  the  custom-house,  in  the  port  of  New 
York,  and  exclusively  employed  in  navigating  the  ocean,  and  carrying  pas- 
sengers and  treasure  between  San  Francisco  and  Panama,  and  was  owned 
by  the  Pacific  Mail  Steamship  Company,  a  corporation  created  under  the 
laws  of  the  State  of  New  York.  To  the  master  of  this  steamship  the  plain- 
tiff offered  his  services  to  pilot  the  vessel  to  sea;  but  his  services  were 
refused,  and  to  recover  the  half-pilotage  fees  allowed  in  such  cases  by  the 
act  of  1861,  the  present  action  was  brought. 

At  the  last  term  of  this  court,  it  was  suggested  that  the  constitutionality 
of  the  act  in  question  was  involved  in  the  decision  of  the  case ;  and  the  court 
thereupon  reserved  its  consideration  until  the  State  of  California  could  be 
represented.  The  Attorney-General  of  the  State  has  accordingly  appeared 
and  filed  a  brief  in  the  case.  Since  the  action  of  the  court  in  this  respect, 
the  legislature  of  California  has  passed  a  new  statute  on  the  subject  of 
pilots  and  pilot  regulations  for  the  port  of  San  Francisco,  re-enacting  sub- 
stantially the  provisions  of  the  original  act,  but  at  the  same  time  in  terms 
repealing  that  act.  And  the  first  point  made  by  the  Attorney-General  is, 
that,  by  reason  of  the  repeal,*  the  present  action  cannot  be  maintained. 
His  position  is,  that  as  the  claim  to  half-pilotage  fees  was  given  by  the 
statute,  the  right  to  recover  the  same  fell  with  the  repeal  of  the  statute ; 
and  that  this  court  must  dismiss  the  writ  of  exTor  on  that  ground. 

The  claim  to  half-pilotage  fees,  it  is  true,  was  given  by  the  statute,  but 
only  in  consideration  of  services  tendered.  The  object  of  the  regulations 
established  by  the  statute  was  to  create  a  body  of  hardy  and  skilful  sea- 
men, thoroughly  acquainted  with  the  harbor,  to  pilot  vessels  seeking  to 
enter  or  depart  from  the  port,  and  thus  give  security  to  life  and  property 
exposed  to  the  dangers  of  a  diflScult  navigation.  This  object  would  be  in 
a  great  degree  defeated  if  the  selection  of  a  pilot  were  left  to  the  option  of 
the  master  of  the  vessel,  or  the  exertions  of  a  pilot  to  reach  the  vessel  in 
order  to  tender  his  services  were  without  any  remuneration.  The  experi- 
ence of  all  commercial  states  has  shown  the  necessity,  in  order  to  create 
and  maintain  an  efficient  class  of  pilots,  of  providing  compensation,  not  only 
when  the  services  tendered  are  accepted  by  the  master  of  the  vessel,  but 
also  when  they  are  declined.  If  the  services  are  accepted,  a  contract  is 
1  Only  so  much  of  the  case  is  given  as  relates  to  this  question.  —  Ed. 


8  STEAMSHIP   COMPANY  V.   JOLIFFE.  [CtlAP.  L 

created  between  the  master  or  owner  of  the  vessel  and  the  pilot,  the  terms 
of  which,  it  is  true,  are  fixed  by  the  statute ;  but  the  transaction  is  not 
less  a  contract  on  that  account.  If  the  services  tendered  are  declined,  the 
half  fees  allowed  are  by  way  of  compensation  for  the  exertions  and  labor 
made  by  the  pilot,  and  the  expenses  and  risks  incurred  by  him  in  placing 
himself  in  a  position  to  render  the  services,  which,  in  the  majority  of  cases, 
would  be  required.  The  transaction,  in  this  latter  case,  between  the  pilot 
and  the  master  or  owners,  cannot  be  strictly  termed  a  contract,  but  it  is  a 
transaction  to  which  the  law  attaches  similar  consequences ;  it  is  a  quasi 
contract.  The  absence  of  assent  on  the  part  of  the  master  or  owner  of  the 
vessel  does  not  change  the  case.  In  that  large  class  of  transactions  desig- 
nated in  the  law  as  implied  contracts,  the  assent  or  convention  which  is  an 
essential  ingredient  of  an  actual  contract  is  often  wanting.  Thus,  if  a  party 
obtain  the  money  of  another  by  mistake,  it  is  his  duty  to  refund  it,  not 
from  any  agreement  on  his  part,  but  from  the  general  obligation  to  do 
justice  which  rests  upon  all  persons.  In  such  case  the  party  makes  no 
promise  on  the  subject;  but  the  law,  "consulting  the  interests  of  morality," 
implies  one ;  and  the  liability  thus  arising  is  said  to  be  a  liability  upon  an 
implied  contract.^  The  claim  for  half-pilotage  fees  stands  upon  substantially 
similar  grounds. 

"  There  are  many  cases,"  says  Mr.  Justice  Curtis,  speaking  for  this  court, 
"in  which  an  offer  to  perform,  accompanied  by  present  ability  to  perform, 
is  deemed  by  law  equivalent  to  performance.  The  laws  of  commercial 
states  and  countries  have  made  an  offer  of  pilotage  services  one  of  those 
cases."  '^ 

The  claim  of  the  plaintiff  below  for  half-pilotage  fees  resting  upon  a 
transaction  regarded  by  the  law  as  a  quasi  contract,  there  is  no  just  ground 
for  the  position  that  it  fell  with  the  repeal  of  the  statute  under  which  the 
transaction  was  had.  When  a  right  has  arisen  upon  a  contract,  or  a  trans- 
action in  the  nature  of  a  contract  authorized  by  statute,  and  has  been  so 
far  perfected  that  nothing  remains  to  be  done  by  the  party  asserting  it, 
the  repeal  of  the  statute  does  not  affect  it,  or  an  action  for  its  enforcement. 
It  has  become  a  vested  right  which  stands  independent  of  the  statute. 
And  such  is  the  position  of  the  claim  of  the  plaintiff  below  in  the  present 
action :  the  pilotage  services  had  been  tendered  by  him ;  his  claim  to  the 
compensation  prescribed  by  the  statute  was  then  peifect,  and  the  liability 
of  the  master  or  owner  of  the  vessel  had  become  fixed. 

And  it  is  clear  that  the  legislature  did  not  intend  by  the  repealing  clause 
in  the  act  of  1864,  to  impair  the  right  to  fees,  which  had  arisen  under  the 
original  act  of  1861.  The  new  act  re-enacts  substantially  all  the  provisions 
of  the  original  act,  relating  to  pilots  and  pilot  regulations  for  the  harbor 
of  San  Francisco.     It  subjects  the  pilots  to  similar  examinations;  it  requires 

J  Argenti  v.  San  Francisco,  16  Cal.  282  ;  Maine,  Ancient  Law,  344. 
3  Cooley  V.  Board  of  Wardens  of  Port  of  i'luladelphia,  12  How.  312. 


SECT.  I  ]  STEAMSHIP   COMPANY  V.    JOLIFFE.  9 

like  qualifications ;  it  prescribes  nearly  the  same  fees  for  similar  services ; 
and  it  allows  half-pilotage  fees  under  the  same  circumstances  as  provided 
in  the  original  act.  It  appears  to  have  been  passed  for  the  purpose  of 
embracing  within  its  provisions  the  ports  of  Mare  Island  and  Benicia,  as 
well  as  the  port  of  San  Francisco ;  of  creating  a  Board  of  Pilot  Examiners 
for  the  three  ports,  in  place  of  the  Board  of  Pilot  Commissioners  for  the 
Port  of  San  Francisco  alone,  and  of  prohibiting  the  issue  of  licenses  to  any 
persons  who  were  disloyal  to  the  Government  of  the  United  States.  The 
new  act  took  effect  simultaneously  with  the  repeal  of  the  first  act ;  its  pro- 
visions may,  therefore,  more  properly  be  said  to  be  substituted  in  the  place 
of,  and  to  continue  in  force  with  modifications,  the  provisions  of  the  original 
act,  rather  than  to  have  abrogated  and  annulled  them.  The  observations 
of  Mr.  Chief  Justice  Shaw,  in  Wright  v.  Oakley,^  upon  the  construction  of 
the  Revised  Statutes  of  Massachusetts,  which  in  terms  repealed  the  previous 
legislation  of  the  State,  may  with  propriety  be  applied  to  the  case  at  bar. 

"  In  construing  the  revised  statutes  and  the  connected  acts  of  amend- 
ment and  repeal,  it  is  necessary  to  observe  great  caution  to  avoid  giving 
an  effect  to  these  acts  which  was  never  contemplated  by  the  legislature. 
In  terms,  the  whole  body  of  the  statute  law  was  repealed  ;  but  these  repeals 
went  into  operation  simultaneously  with  the  revised  statutes,  which  were 
substituted  for  them,  and  wei-e  intended  to  replace  them,  with  such  modi- 
fications as  were  intended  to  be  made  by  that  revision.  There  was  no 
moment  in  which  the  repealing  act  stood  in  force  without  being  replaced  by 
the  corresponding  provisions  of  the  revised  statutes.  In  practical  opera- 
tion and  effect,  therefore,  they  are  rather  to  be  considered  as  a  continuance 
and  modification  of  old  laws  than  as  an  abrogation  of  those  old  and  the 
re-enactment  of  new  ones." 

Jvdgment  affirvied."^ 

1  5  Met.  406. 

2  Mr.  Justice  Miller  (with  whom  concurred  Wayxe  and  Clifford,  JJ.,)  dissented 
in  an  opinion,  of  wl)ich  so  much  as  relates  to  the  nature  of  the  defendant's  obligation  is 
as  follows  :  — 

"It  is  contended  by  counsel  in  the  argument  that  the  judgment  in  this  case  is  based 
on  contract,  and  that  no  repeal  of  the  statute  by  State  law  can  impair  its  obligation. 
This  idea  seems  to  me  without  foundation.  The  statute  enacts,  for  the  protection  of  tlie 
pilots  of  San  Francisco,  that  a  vessel  approaching  or  leaving  tlie  harbor  shall  employ  the 
first  pilot,  licensed  under  that  law,  who  offers  his  services  ;  and  if  the  officers  of  the  boat 
refuse,  it  renders  the  owners  liable  in  an  action  by  that  pilot  to  half  the  usual  pilot  fees. 
If  the  officers  of  the  vessel  accept  the  pilot  and  his  services,  unquestionably  the  law  im- 
plies a  contract  to  pay  either  what  they  may  reasonably  be  worth,  or  the  sum  fixed  by 
statute.  But  if  they  lefuse  to  accept  him  or  his  services,  they  violate  the  law  ;  for  which 
violation  it  imposes  tlie  penalty  of  half  the  usual  pilot  fees.  Here  is  no  element  of 
contract ;  no  consent  of  minds  ;  no  services  rendered  for  which  the  law  implies  an  obli- 
gation to  pay.  It  is  purely  a  case  of  a  violation  of  the  law  in  refusing  to  perform  what 
it  enjoins,  and  the  enforcement  of  the  penalty  for  the  benefit  of  the  party  injured.  It  is 
just  as  easy  to  see  a  contract  in  a  hundred  other  cases  where  the  law  imposes  a  penalty 
for  its  violation,  and  gives  an  action  of  debt  for  the  recovery  of  that  penalty."  —  Ed. 


10  SCEVA  V.   TEUE.  [CHAP.  L 


SCEVA  V.   TRUE. 
In  The  Supreme  Judicial  Court  op  New  Hampshire,  June,  1873. 

[ReDorted  in  53  New  Hampshire  Reports,  627.] 

For  the  purpose  of  raising  questions  of  law,  and  no  other,  the  parties 
agreed  that  the  facts  are  as  stated  in  the  following  motions  to  dismiss,  and 
the  questions  were  reserved  for  the  consideration  of  the  whole  court. 

The  defendant,  by  her  guardian  ad  litem,  moves  to  quash  the  writ  in  this 
suit,  and  to  dismiss  said  suit:  (1)  Because,  at  the  time  of  the  attachment 
of  the  defendant's  real  estate  in  the  town  of  Andover  in  said  suit  —  as 
appears  by  the  officer's  return  upon  said  writ  —  and  at  the  time  of  the  ser- 
vice of  said  writ,  and  for  more  than  forty  years  prior  thereto,  she  was,  and 
had  been,  insane,  and  without  any  guardian,  and  was,  and  for  more  than  a 
quarter  of  a  century  had  been,  so  hopelessly  insane  as  to  have  no  reason  or 
understanding ;  that  at  the  time  of  such  attachment  and  service,  and  since 
about  November  1,  1871,  she  was,  and  has  been,  kept  at  a  private  mad- 
house in  said  town,  by  its  overseers  of  the  poor,  as  one  of  its  insane  poor  ; 
that  the  service  of  said  writ  was  made  and  completed  by  leaving  a  writ  of 
summons  therein,  at  said  mad-house ;  that,  for  nearly  the  entire  forty  years 
prior  to  said  November  1,  1871,  she  had  lived  under  the  same  roof  with 
plaintiff's  intestate,  who  was  her  bi'other-in-law,  and  under  his  charge,  and 
that  all  the  facts  which  transpired  prior  to  the  death  of  said  intestate 
(about  June  1,  1872)  were  well  known  to  him,  and  that  the  plaintift'  had 
notice  or  knowledge  of  all  the  facts  in  the  premises.  (2)  That  this  suit  is 
assumpsit  for  the  support  of  said  Fanny,  under  the  circumstances  before 
set  forth,  and  those  which  follow.  Prior  to  his  death,  August  11,  1822, 
William  True,  father  of  said  Fanny  and  her  sister  Martha,  wife  of  said 
intestate,  owned  a  farm  in  Andover  and  Hill,  with  a  house,  barn,  and  out- 
buildings thereon,  situate  in  said  Andover.  On  May  25,  1822,  in  expecta- 
tion of  his  death,  said  William  True  made  the  following  disposition  of  his 
property  :  He  gave,  by  an  instrument  in  writing  under  seal,  all  his  personal 
property,  upon  certain  conditions  and  subject  to  certain  charges,  to  his 
widow,  Betsey  True,  who  died  upon  said  premises  in  May,  1844,  without 
re-marrying.  He  also  gave  her  on  the  same  day,  in  the  same  way,  "  the 
use  and  occxipation  of  said  real  estate,  both  of  lands,  buildings,  and  tene- 
ments, so  long  as  she,  the  said  Betsey,  remains  my  widow."  He  also,  by 
deed,  conveyed  on  the  same  day  one  undivided  half  of  all  said  real  estate 
to  each  of  said  daughters.  Said  intestate  carried  on  said  premises  in  1822, 
and  married  said  Martha  in  December,  1823,  and  lived  on  said  premises 
till  about  one  month  before  his  death.  All  the  parties,  save  Fanny,  treated 
said  deeds  and  instruments  as  valid,  and  supposed  they  were  valid  ;  and, 


SECT.  I.]  SCEVA   V.   TRUE.  11 

aaiJe  from  the  time  that  the  said  defendant  was  away  in  insane  asylums 
and  infirmaries  for  treatment,  all  lived  together  on  said  premises  in  one 
family  till  they  died,  or  until  said  Enoch  F.  Sceva  refused  to  support  said 
Fanny  longer;  and  she  was  taken  away  about  said  November  1,  and  when 
said  Enoch  F.  Sceva  left,  the  month  prior  to  his  death.  Said  Sceva  took 
the  entire  charge  of  the  premises,  used  the  crops  and  the  proceeds  of  tlie 
lumber,  wood,  and  bark,  sold  off'  of  the  whole  farm  for  the  common  benefit 
of  the  family,  and  paid  the  taxes  and  other  bills  for  the  support  and  main- 
tenance of  the  family.  No  administration  was  ever  had  upon  any  part  of 
the  estate  of  said  "William  True,  nor  was  there  any  use  or  trust  for  the 
benefit  of  said  Fanny.  No  attempt  was  ever  made  to  make  any  contract 
•with  said  Fanny  about  her  support,  or  anything  else.  No  application  was 
made  for  the  appointment  of  a  guardian  in  the  interest  of  said  Enoch  F. 
Sceva,  because  of  the  opposition  of  his  wife  to  any  step  looking  to  that  end. 
She  has  been  supported  during  said  forty  years  by  said  Sceva,  his  wife,  and 
her  mother,  out  of  the  avails  of  said  real  estate  taken  as  aforesaid,  and  out 
of  their  own  funds.  Since  1844  her  chief  support  has  been  from  said 
Sceva.  Said  intestate  was  worth  nothing  when  he  commeuced  on  said 
farm,  and  died  worth  about  $1600. 

Shirley,  for  the  defendant. 

The  foundation  principle  of  the  entire  law  of  contracts  is,  that  the  par- 
ties must  have  the  capacity  to  contract,  and  must  actually  exercise  their 
faculties  by  contracting.  Here  there  was  no  capacity,  for  there  was  but 
one  mind ;  no  contract  was  made,  and  no  attempt  was  made  to  make  one. 
The  two  vital  facts,  without  which  no  contract,  tacit  or  express,  can  exist 
—  capacity  and  its  exercise  —  are  wanting.  Was  there  an  implied  con- 
tract 1  What  does  that  term  mean  1  In  thousands  of  cases,  in  the  books, 
we  know  just  what  it  means.  The  parties  have  capacity  to  contract ;  facts, 
circumstances,  few  or  many,  clear  or  complicated,  exist,  which  lead  the 
minds  of  the  jurors  to  the  conclusion  that  the  minds  of  the  parties  met. 
Minds  may  meet  by  words,  acts,  or  both.  The  words  even  may  negative 
such  meeting,  but  "acts  which  speak  louder  than  words"  may  conclude 
]»im  who  denies  a  tacit  contract.  Aside  from  cases  where  the  capacity  to 
contract  is  wanting,  no  instance  now  occurs  to  us  in  which  the  implied 
contract  cannot  be  supported  upon  these  principles,  and  tlio  familiar  doc- 
trines of  waiver  and  estoppel.  Our  position  is,  that  where  there  is  no  ex- 
press contract,  a  jury  may  from  circumstances  infer  one,  but  that  this  can 
in  no  case  be  done  where  the  capacity  to  contract  is  wanting.  This  court 
has  settled  that  there  is  a  distinction  between  the  cases  of  minors  and 
lunatics.  Burke  v.  Allen. ^  The  reasons  are  apparent.  It  is  another  fun- 
damental principle,  that  no  one,  by  voluntarily  performing  services  for 
another,  can  make  that  other  liis  debtor.  If  tlicse  principles  apply  to  cases 
where  the  contracting  mind  is  wanting,  they  settle  this  case.     We  know  it 

1  29  N.  II.  117. 


12  SCEVA   V.  TRUE.  [CHAP.  I, 

is  sometimes  said,  in  such  a  case,  *'  the  law  will  imply  a  contract."  What 
does  that  mean?  As  it  seems  to  us,  only  this:  that  where  A.,  who  has 
capacity  to  contract,  furnishes  B.,  who  is  totally  destitute  of  such  capacity, 
what  is  proper  for  B.  to  have,  the  judges  will  turn  the  bench  into  a  broker's 
boai'd,  will  substitute  themselves  for  B.,  make  a  contract  where  none  existed, 
cause  it  to  relate  back  to  the  voluntary  acts  of  A,  and  then  sit  in  judgment 
Upon  and  enforce  their  own  contract.  It  is  a  perversion  of  language  to  call 
such  a  performance  a  contract  of  any  kind.  It  is  judicial  usurpation.  The 
Constitution  gave  the  court  no  such  power.  The  court  has  no  power  to 
make  contracts  for  people:  it  can  only  infer  one  where  a  jury  might.^ 

Barnard  for  the  plaintiff. 

Ladd,  J.  It  is  obvious,  we  think,  that  one  question  which  has  been 
argued  by  counsel  at  considerable  length,  namely,  whether  legal  service  of 
a  writ  can  be  made  upon  an  insane  person  or  idiot,  is  not  before  the  court, 
on  this  motion  to  dismiss,  in  such  way  that  any  practical  results  would  be 
gained  by  deciding  it.  The  agreement  of  the  parties  is  not  that  the  suit 
shall  be  dismissed  in  case  the  court  are  of  opinion  that  the  service  was  in- 
sufficient, but  only  that  the  facts  may  be  taken  to  be  as  stated  for  no  other 
purpose  but  to  present  the  question  to  the  court ;  and,  if  the  decision 
should  be  adverse  to  the  plaintiff,  we  see  no  reason  why  he  is  not  still  in  a 
position  to  take  the  objection  that  the  matter  ought  to  have  been  pleaded 
in  abatement  in  order  that  an  issue  may  be  raised  for  trial  by  jury  upon 
the  facts  which  he  reserves  the  right  to  contest.  For  this  reason  we  have 
not  considered  that  question. 

The  other  facts  stated  in  the  motion  (which  is  to  be  regarded  rather  as 
an  agreed  case  than  a  motion  to  dismiss)  stand  upon  a  different  footing, 
inasmuch  as  they  go  to  the  merits  of  the  case,  and  may  be  pleaded  in  bar 
or  given  in  evidence  under  the  general  issue,  and,  when  so  pleaded  or 
proved,  their  legal  effect  will  be  a  matter  upon  which  the  court,  at  the 
trial,  must  pass.  Some  suggestions  upon  this  part  of  the  case  may  there- 
fore be  of  use. 

We  regard  it  as  well  settled  by  the  cases  referred  to  in  the  briefs  of 
counsel,  many  of  which  have  been  commented  on  at  length  by  Mr.  Shirley 
for  the  defendant,  that  an  insane  person,  an  idiot,  or  a  person  utterly  bereft 
of  all  sense  and  reason  by  the  sudden  stroke  of  accident  or  disease,  may  be 
held  liable,  in  assumpsit,  for  necessaries  furnished  to  him  in  good  faith 
while  in  that  unfortunate  and  helpless  condition.  And  the  reasons  upon 
which  this  rests  are  too  broad,  as  well  as  too  sensible  and  humane,  to  be 
overborne  by  any  deductions  which  a  refined  logic  may  make  from  the  cir- 
cumstance that  in  such  cases  there  can  be  no  contract  or  promise  in  fact, 
no  meeting  of  the  minds  of  the  parties.  The  cases  put  it  on  the  ground  of 
an  implied  contract ;  and  by  this  is  not  meant,  as  the  defendant's  counsel 
seems  to  suppose,  an  actual  contract,  —  that  is,  an  actual  meeting  of  the 

1  Counsel  here  cited  a  number  of  cases.  —  Ed. 


SECT.  I.]  SCEVA   V.   TRUE.  13 

minds  of  the  parties,  an  actual,  mutual  understanding,  to  be  inferred  from 
language,  acts,  and  circumstances,  by  the  jury,  —  but  a  contract  aud  prom- 
ise, said  to  be  implied  by  the  law,  where,  in  point  of  fiict,  there  was  no 
contract,  no  mutual  understanding,  and  so  no  promise.  The  defendant's 
counsel  says  it  is  usurpation  for  the  court  to  hold,  as  matter  of  law,  that 
there  is  a  contract  and  a  promise,  when  all  the  evidence  in  the  case  shows 
that  there  was  not  a  contract,  nor  the  semblance  of  one.  It  is  doubtless  a 
legal  fiction,  invented  and  used  for  the  sake  of  the  remedy.  If  it  was  ori- 
ginally usurpation,  certaiuly  it  has  now  become  very  inveterate,  aud  firmly 
fixed  in  the  body  of  the  law. 

Suppose  a  man  steals  my  horse,  and  afterwards  sells  it  for  cash  :  the  law 
says  I  may  waive  the  tort,  and  recover  the  money  received  for  the  animal 
of  him  in  an  action  of  assumpsit.  Why  ?  Because  the  law,  in  order  to 
protect  my  legal  right  to  have  the  money,  and  enforce  against  the  thief  his 
legal  duty  to  hand  it  over  to  me,  implies  a  promise,  that  is,  feigns  a  prom- 
ise when  there  is  none,  to  support  the  assumpsit.  In  order  to  recover,  I 
have  only  to  show  that  the  defendant,  without  right,  sold  my  horse  for 
cash,  which  he  still  retains.  "Where  are  the  circumstances,  the  language 
or  conduct  of  the  parties,  from  which  a  meeting  of  their  minds  is  to  be  in- 
feiTed,  or  implied,  or  imagined,  or  in  any  way  found  by  the  juryl  The 
defendant  never  had  any  other  purpose  but  to  get  the  money  for  the  horse 
and  make  off  with  it.  The  owner  of  the  horse  had  no  intention  to  sell  it, 
never  assented  to  the  sale,  and  only  seeks  to  recover  the  money  obtained 
for  it  to  save  himself  from  total  loss.  The  defendant,  in  such  a  case,  may 
have  the  physical  capacity  to  promise  to  pay  over  to  the  owner  the  money 
which  he  means  to  steal ;  but  the  mental  and  moral  capacity  is  wanting, 
and  to  all  practical  intents  the  capacity  to  promise  according  to  his  duty 
may  be  said  to  be  as  entirely  wanting  as  in  the  case  of  an  idiot  or  lunatic. 
At  all  events,  he  does  not  do  it.  He  struggles  to  get  away  with  the  money, 
and  resists  with  a  determination  never  to  pay  if  he  can  help  it.  Yet  the 
law  implies,  and  against  his  utmost  resistance  forces  into  his  mouth,  a 
promise  to  pay.  So,  where  a  brutal  husband,  without  cause  or  provoca- 
tion, but  from  wanton  cruelty  or  caprice,  drives  his  wife  from  his  house, 
with  no  means  of  subsistence,  and  warns  the  tradesmen  not  to  trust  her  on 
his  account,  thus  expressly  revoking  all  authority  she  may  be  supposed  to 
have,  as  his  agent,  by  virtue  of  the  marital  relation,  courts  of  high  author- 
ity have  held  that  a  promise  to  pay  for  necessaries  furnished  her  while  in 
this  situation,  in  good  faith,  is  imi)lio(l  by  law  against  the  hushaiul,  resting  , 
upon  and  arising  out  of  his  legal  obligation  to  furnish  her  support.  See 
remark  of  SAncEXT  in  Ray  v.  Alden,^  aud  authorities  cited.  So,  it  was  held 
that  the  law  will  imply  a  promise  to  pay  toll  for  passing  upon  a  turnpike 
road,  notwithstanding  tlie  defendant,  at  the  time  of  passing,  denied  his  lia- 
bility and  refused  payment.  Proprietors  of  Turnpike  v.  Taylor.'  In  the 
»  50  N.  H.  83.  a  6  N.  H.  499. 


14  SCEVA   V.    TRUE.  [CHAP.  L 

recent  English  case  of  The  Great  Northern  Kailw.  Co.  v.  Swafficld,^  the 
dcfeiuliint  stMit  a  horse  by  the  phiintiff 's  railway  directed  to  himself  at  S. 
Btatiuu.  On  tlie  arrival  of  the  horse  at  S.  station,  at  night,  there  was  no 
one  to  meet  it,  and  the  plaintitls,  having  no  accommodatiun  at  the  sta- 
tion, sent  the  horse  to  a  livery  stable.  The  defendant's  servant  soon  after 
arrived  and  demanded  the  horse:  he  was  referred  to  the  livery  stable 
keeper,  who  refnscil  to  deliver  the  horse  except  on  payment  of  charges 
which  were  admitted  to  be  reasonable.  On  the  next  day  the  defendant 
came  and  demanded  the  horse,  and  the  station-master  offered  to  pay  the 
cliavgcs  and  lot  the  defendant  take  away  the  horse ;  but  the  defendant 
declijied,  and  went  away  without  the  horse,  which  remained  at  the  livery 
stable.  The  plaintiffs  afterwards  offered  to  deliver  the  horse  to  tlie  defend- 
ant at  S.  witliout  payment  of  any  charges,  but  the  defendant  refused  to 
receive  it  unless  delivered  at  his  farm,  and  with  payment  of  a  sum  of  money 
for  his  expenses  and  loss  a  zime.  Some  months  after,  the  plaintiffs  paid 
the  livery  stable  keeper  his  charges,  and  sent  the  horse  to  the  defendant, 
who  received  it ;  and  it  was  held  that  the  defendant  was  liable,  upon  the 
ground  of  a  contract  implied  by  law,  to  the  plaintiffs  for  the  livery  charges 
thus  paid  by  them. 

Illustrations  might  be  multiplied,  but  enough  has  been  said  to  show  that 
when  a  contract  or  promise  implied  by  law  is  spoken  of,  a  very  different 
thing  is  meant  from  a  contract  in  f;\ct,  whether  express  or  tacit.  The  evi- 
dence of  an  actual  contract  is  generally  to  be  found  either  in  some  writing 
made  by  the  parties,  or  in  verbal  communications  which  passed  between 
them,  or  in  their  acts  and  conduct  considered  in  the  light  of  the  circum- 
stances of  each  particular  case,  A  contract  implied  by  law,  on  the  con- 
trary, rests  upon  no  evidence.  It  has  no  actual  existence ;  it  is  simply  a 
mythical  creation  of  the  law.  The  law  says  it  shall  be  taken  that  tlicre 
was  a  promise,  when,  in  point  of  fact,  there  was  none.  Of  course  this  is 
not  good  logic,  for  the  obvious  and  sufficient  reason  that  it  is  not  true.  It 
is  a  legal  fiction,  resting  wholly  for  its  support  on  a  plain  legal  obligation, 
and  a  plain  legal  right.  If  it  were  true,  it  would  not  be  a  fiction.  There 
is  a  class  of  legal  rights,  with  their  correlative  legal  duties,  analogous  to 
the  obh'^/aiiones  quasi  ex  contractu  of  the  civil  law,  which  seem  to  lie  in  tlio 
region  between  contracts  on  the  one  hand,  and  torts  on  the  other,  and  to 
call  for  the  application  of  a  remedy  not  strictly  furnished  either  by  actions 
ex  contractu,  or  actions  ex  delicto.  The  common  law  supplies  no  action  of 
duty,  as  it  does  of  assimipsit  and  trespass ;  and  hence  the  somewhat  awk- 
ward contrivance  of  this  fiction  to  apply  the  remedy  of  assumpsit  where 
there  is  no  true  contract,  and  no  promise  to  support  it.' 

»  L.  R.  9  Ex.  132. 

^  The  part  of  Roman  law  which  has  had  most  extensive  innnence  on  foreir^  subjects 
of  inquiry  has  hcen  tlic  law  of  Ol)lic,'ation,  or,  what  comes  nearly  to  the  same  thiriT,  of 
Contract  and  Delict.     The  Koinans  themselves  were  not  unaware  of  the  offices  which  the 


SECT.  I.]  SCEVA   V.   TRUE.  15 

A.11  coufusion  in  this  matter  might  be  avoided,  as  it  seems  to  me,  by  a 
suitable  discrimination  in  the  use  of  the  term  implied  contract.  In  the 
discussion  of  any  subject,  there  is  always  danger  of  spending  breath  and 
strength  about  mere  words,  as  well  as  of  falling  into  en-or  when  the  same 
term  is  used  to  designate  two  different  things.  If  the  term,  implied  con- 
copious  and  inalleal)le  terminology  belonging  to  this  part  of  their  system  might  be  made 
to  discharge,  and  tliis  is  jiroved  by  their  employment  of  the  peculiar  adjunct  quasi  in 
such  expressions  as  Quasi- Con  tract  and  Quasi-DeUct.  "Quasi,"  so  used,  is  exclusively 
a  term  of  classification.  It  has  been  usual  with  English  critics  to  identify  the  quasi- 
contracts  with  implied  contracts,  but  this  is  an  error  ;  for  implied  contracts  are  true 
contracts,  which  quasi-contracts  are  not.  In  implied  contracts,  acts  and  circumstance* 
are  the  symbols  of  the  same  ingredients  which  are  symbolized,  in  express  contracts,  by 
words  ;  ana  whether  a  man  employs  one  set  of  symbols  or  the  other  must  be  a  matter  of 
indifference  so  far  as  concerns  the  theory  of  agieement.  But  a  quasi-contract  is  not  a 
contrart  at  all.  The  commonest  sample  of  the  class  is  the  relation  subsisting  between 
two  persons,  one  of  whom  has  paid  money  to  the  other  through  mistake.  The  law,  con- 
sulting the  interests  of  morality,  imposes  an  obligation  on  tlie  receiver  to  refund,  but  the 
very  nature  of  the  transaction  indicates  tliat  it  is  not  a  contract,  inasmuch  as  the  Con- 
vention,  the  most  essential  ingredient  of  Conti-act,  is  wanting.  Tliis  word  "quasi," 
prefixed  to  a  term  of  Toman  law,  implies  that  the  conception  to  which  it  serves  as  an 
index  is  connected  witli  the  conception  with  which  the  comparison  is  instituted  by  a 
strong  superficial  analogy  or  resemblance.  It  does  not  denote  that  the  two  conceptions 
are  the  same,  or  that  they  belong  to  the  same  genus.  On  the  contrary,  it  negatives  the 
notion  of  an  identity  between  them  ;  but  it  points  out  that  they  are  sufficiently  similar 
for  one  to  be  classed  as  the  sequel  to  the  other,  and  that  the  phraseology  taken  from  one 
department  of  law  may  be  transferred  to  the  other,  and  employed  without  violent  strain- 
ing, in  the  statement  of  rules  which  would  otherwise  be  imperfectly  expressed.  — Maine, 
Ancient  Law,  4th  ed.,  343-4. 

Strictly,  Quasi-Contracts  are  acts  done  by  one  man  to  his  own  inconvenience  for  the 
advantage  of  another,  but  without  the  authority  of  the  other,  and,  conseciuently,  without 
any  promise  on  the  part  of  the  other  to  indemnify  him  or  reward  him  for  his  trouble. 

Instances  :  Ncgotlorum  gestio,  in  the  Roman  law ;  Salvage,  in  the  English. 

An  obligation  arises,  such  as  would  have  arisen  had  the  one  party  contracted  to  do 
the  act,  and  the  other  to  indemnify  or  reward.  Hence  the  incident  is  called  a  "  quasi- 
contract ; "  L  e.  an  incident,  in  consequence  of  which  one  person  is  obliged  to  another, 
as  if  a  contract  had  been  made  between  them. 

The  basis  is,  to  incite  to  certain  useful  actions.  If  the  principle  were  not  admitted  at 
all,  such  actions  would  not  be  performed  so  often  as  they  are.  If  pushed  to  a  certain 
extent,  it  would  lead  to  inconvenient  and  impertinent  intermeddling,  with  the  view  of 
catching  reward.  "Whether  it  shall  be  admitted,  or  not,  depends  upon  the  nature  of  the 
act  :  —  i.  e.  its  general  nature  ;  since,  without  a  general  rule,  the  inducenient  would  not 
operate,  nor  would  the  limitation  to  the  pnnci[>!e  be  understood.  Acts  whicli  come  not 
within  the  rule,  however  useful  in  the  particular  instance,  must  be  left  to  benevolence 
incited  by  the  other  sanctions. 

But  quasi-contract  seems  to  have  a  larger  import,  —denoting  any  incident  by  which 
one  party  obtains  an  advantage  he  ought  not  to  retain,  because  the  retention  would 
damage  another  ;  or  by  reason  of  which  he  ought  to  indemnify  tlie  other.  The  promi- 
nent idea  in  quasi-contract  seems  to  be  an  undue  advantage  which  would  be  acquired  by 
the  obligor,  if  he  were  not  compelled  to  relinquish  it  or  to  indemnify.  —2  Jtw^m,  Jui-ts- 
prudence,  4th  ed.,  944.  —  Ed. 


16  SCEVA  V.    TKUE.  [CHAP.  I. 

tract,  be  used  indifferently  to  denote  (1)  the  fictitious  creation  of  the  law 
spoken  of  above  ;  (2)  a  true  or  actual  but  tacit  contract,  that  is,  one  where 
a  meeting  of  the  minds  or  mutual  understanding  is  inferred  as  matter  of 
f-Act  from  circumstances,  no  words  written  or  verbal  liaving  been  used ;  and 
(3)  that  state  of  things  where  one  is  estopped  by  his  conduct  to  deny  a 
contract,  although,  in  fact,  he  has  not  made  or  intended  to  make  one,  —  it 
is  not  strange  that  confusion  should  result,  and  disputes  arise  where  there 
is  no  difference  of  opinion  as  to  the  substance  of  the  matter  in  controversy : 
wherfas,  were  a  different  term  applied  to  each,  as,  for  example,  that  of 
legal  duty  to  designate  the  first,  contract,  simply,  to  designate  the  second, 
and,  contract  by  estoppel,  the  third,  this  difficulty  would  be  avoided.  It 
would  of  course  come  to  the  same  thing,  in  substance,  if  the  first  were 
always  called  an  implied  contract,  while  the  other  two  were  otherwise 
designated  in  such  way  as  to  show  distinctly  what  is  meant.  This  is  not 
always  done,  and  an  examination  of  our  own  cases  would  perhaps  show  that 
more  or  less  confusion  has  arisen  from  such  indiscriminate  use  of  the  term. 
A  better  nomenclature  is  desirable.  But  whatever  terms  are  employed,  it 
is  indispensable  that  the  distinction,  which  is  one  of  substance,  should  be 
kept  clearly  in  mind,  in  order  that  the  principles  governing  in  one  class 
of  cases  may  not  be  erroneously  applied  to  another.  See  remarks  of  Smith, 
J.,  in  Bixby  v.  Moore,^  and  authorities  cited  at  page  404. 

Much  may  doubtless  be  said  against  supplying  a  remedy  for  the  enforce- 
ment of  a  plain  legal  right  "by  so  rude  a  device  as  a  legal  fiction"  —  * 
but,  at  this  time  of  day,  that  is  a  matter  for  the  consideration  of  the 
legislature  rather  than  the  courts.  The  remedy  of  indebitatus  assumjmt 
can  hardly  be  abolished  in  that  large  class  of  cases  where  it  can  only  be 
sustained  by  resorting  to  a  fiction  until  some  other  is  furnished  to  take  its 

place. 

It  by  no  means  follows  that  this  plaintiff  is  entitled  to  recover.  In  the 
first  place,  it  must  appear  that  the  necessaries  furnished  to  the  defendant 
were  furnished  in  good  faith,  and  with  no  purpose  to  take  advantage  of  her 
unfortunate  situation.  And  upon  this  question,  the  gi-eat  length  of  time 
which  was  allowed  to  pass  without  procuring  the  appointment  of  a  guardian 
for  her  is  a  fact  to  which  the  jury  would  undoubtedly  attach  much  weight. 
Its  significance  and  importance  must,  of  course,  depend  very  much  on  the 
circumstances  under  which  the  delay  and  omission  occurred,  all  of  which 
will  be  for  the  jury  to  consider  upon  the  question  whether  everything  was 
done  in  good  faith  towards  the  defendant,  and  with  an  expectation  on  the 
part  of  the  plaintiff's  intestate  that  he  was  to  be  paid.  Again :  the  jury 
are  to  consider  whether  the  support  for  which  the  plaintiff  now  seeks  to 
recover  was  not  furnished  as  a  gi-atuity,  with  no  expectation  or  intention 
that  it  should  be  paid  for,  except  so  far  as  compensation  might  be  derived 
from  the  use  of  the  defendant's  share  of  the  farm.  And,  upon  this  point, 
1  51  N.  H.  402.  '  Maine,  Ancient  Law,  2€. 


SECT.  I.]  THE   PEOPLE   V.   GILBERT   M.   SPKIR.  17 

the  relationship  existing  between  the  parties,  the  length  of  time  the  defend- 
ant was  there  in  the  family  without  any  move  on  the  part  of  Enoch  F. 
Sceva  to  charge  her  or  her  estate,  the  absence  (if  such  is  the  fact)  of  an 
account  kept  by  him  wherein  she  wt\s  charged  with  her  support,  and  cred- 
ited for  the  use  and  occupation  of  the  land,  —  in  short,  all  the  facts  and 
circumstances  of  her  residence  with  the  family  that  tend  to  show  the  inten- 
tion or  expectation  of  Enoch  F.  Sceva  with  respect  to  being  paid  for  her 
support,  are  for  the  jury.  Munger  v.  Munger ;  ^  Seavey  v.  Seavey ; "''  Bundy 
V.  Hyde.3  If  these  services  were  rendered,  and  this  support  furnished,  with 
no  expectation  on  the  part  of  Enoch  F.  Sceva  that  he  was  to  charge  or  bo 
paid  therefor,  this  suit  cannot  be  maintained ;  for  then  it  must  be  regarded 
substantially  in  the  light  of  a  gift  actually  accepted  and  appropriated  by 
the  defendant,  without  reference  to  her  capacity  to  make  a  contract,  or 
even  to  signify  her  acceptance  by  any  mental  assent. 

In  this  view,  the  facts  stated  in  the  case  will  be  evidence  for  the  jury  to 
consider  upon  the  trial ;  but  they  do  not  present  any  question  of  law  upon 
which  the  rights  of  the  parties  can  be  determined  by  the  court. 

Case  discharged. 


THE    PEOPLE    ex,   rel.   CHARLES    DUSENBURY,    APPELLANT,    v. 
GILBERT   ^L   SPEIR  AS  JUSTICE,   ETC.,   RESPONDENT. 

In  the  Court  of  Appeals  of  New  York,  April,  1879. 
[Reported  in  77  New  York  Reports,  144.] 

Appeal  from  order  of  the  General  Term  of  the  Supreme  Court,  in  the 
first  judicial  department,  affirming  upon  certiorari,  proceedings  under  the 
non-imprisonment  act  (chapter  300,  Laws  of  1831),  by  and  before  defend- 
ant as  justice  of  the  Supreme  [Superior]  Court,  which  resulted  in  the 
issuing  of  a  warrant  for  the  arrest  of  the  relator. 

The  facts  appear  sufficiently  in  the  opinion. 

Hall  dc  Blandy,  for  appellant. 

D.  M.  Porter,  for  respondent. 

Danfortii,  J.  In  the  course  of  supplementary  proceedings  instituted 
by  judgment  and  execution  creditors  of  Selah  Hiler,  William  S.  Kiely  was 
appointed  receiver  of  the  property,  etc.,  of  the  judgment  debtor,  and  as 
such  commenced  an  action  in  the  Superior  Court  of  the  city  of  New  York, 
against  Selah  Hiler,  Charles  Dusenbury,  George  W.  Lane,  as  chamberlain 
of  the  city  of  New  York,  and  others.  It  appears  from  the  complaint  that 
at  the  time  of  his  appointment  there  was  an  action  pending  in  favor  of 
Hiler  against  certain  parties,  in  which  a  considerable  sum  of  money  had 
been  oV)tained  and  placed  in  the  hands  of  Lane  as  chamberlain,   to  the 

>  33  N.  H.  581.  a  37  N.  II.  125.  a  50  N.  11.  116. 

2 


18  THE    PEOPLE   V.   GILBERT   M.    SPEIR.  [CHAP.  L 

credit  of  the  action,  and  payment  of  the  same  to  Hiler  was  forbidden  by 
injunction;  that  afterwards  Hiler,  with  the  fraudulent  intent  of  obtaining 
possession  of  the  money,  and  preventing  it  from  coming  to  the  hands  of 
his  creditors,  and  with  intent  to  violate  the  injunction  order,  claimed  that 
the  money  had  been  previously  assigned  by  him  to  Dusenbury,  in  trust  for 
the  benefit  of  certain  creditors  of  Hiler;  that  Dusenbury,  with  knowledge 
of  this  injunction,  induced  Lane  to  pay  the  money  to  him  as  such  trustee; 
that  the  assignment  under  which  Dusenbury  made  the  claim  was  fraudu- 
lent and  void  as  against  creditors,  and  the  plaintiff  as  receiver;  and  the 
prayer  was  that  the  assignment  be  declared  fraudulent  and  void,  and  the 
plaintiff  have  judgment  against  each  defendant,  payable  out  of  the  money 
received  by  him.  Issue  was  joined,  and  the  trial  court  found,  and  de- 
cided among  other  things,  "that  the  defendants  Hiler  and  Dusenbury, 
with  the  fraudulent  intent  and  purpose  of  obtaining  possession  of  said 
money,  or  of  transferring  and  disposing  of  the  same,  and  preventing  it 
from  coming  to  the  hands  of  creditors,  and  with  full  knovvledge  of  said  in- 
junction order,  and  with  the  intent  to  violate  it,  procured  by  fraud  an 
order  from  the  court,  requiring  the  chamberlain  to  pay  to  Dusenbury  as 
trustee  the  money  so  deposited  with  him.  That  it  was  so  paid  to  him  as 
trustee.  That  no  assignment  was  in  fact  made  to  Dusenbury  as  trustee  or 
otherwise ;  that  he  was  not  individually  or  as  trustee  entitled  to  it ;  that 
he  wrongfully  and  fraudulently  procured  possession  of  the  same,  and  judg- 
ment was  entered  as  stated  in  the  affidavit  hereinafter  referred  to. 

After  the  recovery  of  this  judgment,  the  plaintiff  upon  the  affidavit  of 
his  attorney,  to  which  was  attached  a  copy  of  the  judgment  roll  in  the  ac- 
tion above  referred  to,  applied  to  the  respondent  for  a  warrant  for  the 
arrest  of  the  relator,  under  the  provisions  of  the  act  of  1831  (chapter  300) 
"  to  abolish  imprisonment  for  debt,  and  to  punish  fraudulent  debtors." 
Upon  the  return  of  the  warrant  a  hearing  was  had,  and  the  relator  dis- 
charged. The  General  Term  of  the  Supreme  Court  reversed  the  determi- 
nation of  the  magistrate,  and  upon  a  rehearing,  the  respondent,  following 
the  inilings  of  that  court,  convicted  the  relator,  and  he  removed  the  pro- 
ceedings to  the  Supreme  Court,  where  they  were  affirmed,  and  from  the 
order  of  that  court  the  relator  has  appealed.  The  first  question  to  be  ex- 
amined relates  to  the  jurisdiction  of  the  officer  who  issued  the  warrant. 
His  authority  in  this  case  w^as  not  absolute.  It  depended  upon  the  exist- 
ence of  certain  facts.  He  was  required  by  the  statute  from  which  he 
derived  his  authority  to  have  proof  of  these  facts,  and  the  same  statute 
declared  that  he  should  not  issue  a  warrant  without  that  proof,  which  is 
there  prescribed,  and  thus  made  indispensable  to  the  exercise  of  his  author- 
ity. His  jurisdiction,  and  its  limitation  depend  upon  the  provisions  of  the 
act  above  referred  to.  Under  those  provisions,  no  person  can  lawfully  be 
arrested  or  imprisoned  on  any  civil  process,  issuing  out  of  any  court  of  law, 
or  on  any  execution  issuing  out  of  any  court  of  equity  in  any  suit  or  pro- 


SECT.  I.]  THE   PEOPLE    V.   GILBERT   M.    SPEIR.  19 

ceediug  instituted  for  the  recovery  of  any  money  due  upon  any  judgment 
or  decree  founded  upon  contract,  or  due  upon  any  contract  express  or  im- 
plied, or  for  the  recovery  of  any  damages  for  the  non-performance  of  any 
contract.  (Section  1.)  But  in  such  cases  it  is  made  "lawful  for  the 
plaintift'"  who  shall  have  obtained  judgment  against  such  person,  to  apply 
to  any  judge  of  the  court  in  which  such  suit  is  brought  for  a  warrant  to 
arrest  the  defendant  therein.  (Section  3.)  Then  follow  these  words  of 
prohibition  :  "  No  such  warrant  shall  issue,  unless  satisfactory  evidence  be 
adduced  to  him  by  the  affidavit  of  the  plaintiff,  or  of  some  other  person, 
that  there  is  a  debt  or  demand  due  to  the  plaintiff  from  the  defendant, 
amounting  to  more  than  fifty  dollars,  and  specifying  the  nature  and  amount 
thereof,  as  near  as  may  be,  for  which  the  defendant  according  to  the  pro- 
visions of  this  act  cannot  be  arrested  or  imprisoned,"  and  establishing  one 
or  more  particulars,  which  are  specified,  but  which  do  not  become  at  pres- 
ent, material  in  this  inquiry.  "We  are  thus  met  at  the  outset  with  the 
question,  whether  the  judgment,  for  the  enforcement  of  which  these  pro- 
ceedings were  instituted,  was  founded  upon  contract,  or  resulted  from  a 
suit,  which  had  for  its  cause  of  action  a  claim  for  damages  for  the  non-per- 
formance of  a  conti'act.  And  this  inquiry  must  be  answered  from  the 
affidavit  presented  to  the  judge,  and  on  which  he  based  his  warrant.  The 
affidavit  states  the  recovery  of  a  judgment  against  the  relator,  in  fiivor  of 
the  plaintiff,  William  S.  Kieley,  as  receiver,  etc.,  of  Selah  Hiler,  for 
$3,627.91,  but  neither  states  the  cause  of  action  nor  the  nature  of  the 
indebtedness,  nor  that  it  was  upon  contract  express  or  implied,  nor  any 
fact  from  which  either  of  these  conditions  can  be  iufeired.  The  affidavit 
however  contains  these  words :  "  Deponent  further  says  and  charges,  that 
he  verily  believes  that  the  defendant  Dusenbury  neither  had  any  title  or 
right  to  the  moneys  received  by  him  from  the  chamberlain  of  the  city  of 
New  York,  which  is  particularly  mentioned  in  the  judgment  roll  in  which 
the  judgment  in  favor  of  the  plaintiff  was  recovered,  and  that  he  well 
knew  that  he  had  none,  but  that  he  obtained  it  in  disobedience  of  the  in- 
junction restraining  him  from  receiving  the  same,  and  by  fraud  and  im- 
position on  the  Court  of  Common  Pleas,  which  court  made  the  order  on 
which  he  obtained  the  money,  and  this  statement  is  made  upon  the  judg- 
ment roll  in  this  action,  and  findings  of  fact  contained  in  said  judgment 
roll,  and  upon  the  documentary  evidence  put  in  evidence  on  the  trial  to 
obtain  said  judgment.  Deponent  further  says  the  said  judgment  is  wholly 
unpaid,  and  constitutes  the  foregoing  indebtedness ;  and  further  says  that 
for  the  said  cause  of  action,  the  defendant  by  the  first  two  sections  of  the 
act  (above  referred  to)  cannot  be  airested  or  imprisoned,  as  deponent  is 
advised  and  believes."  The  clause  last  cited  states  a  mere  inference  of  law, 
and  that  not  the  verified  inference  of  the  affiant,  but  his  belief  merely  of 
the  truth  of  jidvicc  given  him.      It  is  not  enough.      Latham  v.  Westervelt ;  ^ 

1  20  15:u-b.  200. 


20  THE   PEOPLE   V.    GILBERT   M.    SPEIR.  [CHAP.  L 

Broadhead  v.  McConnell.^  Every  fact  stated  in  the  affidavit  as  to  the 
cause  of  action,  meagre  as  it  is  in  facts,  leads  to  an  inference  that  there 
was  no  contract  at  the  foundation  of  the  action,  nor  any  act  or  circum- 
stance from  which  one  could  be  inferred  or  implied.  Indeed  the  facts 
charged  indicate  directly  a  cause  of  action  resting  in  tort.  That  the  de- 
fendant obtained  the  money  without  right  or  title,  and  that  he  well  knew 
he  had  none,  excludes  the  idea  that  he  received  it  under  a  contract,  and 
when  we  are  told  furthermore  that  he  received  the  money  in  disobedience 
of  an  injunction  order  restraining  him  from  receiving  it,  and  then  that  he 
obtained  it  by  fraud  and  imposition  on  the  court,  we  perceive  not  only  that 
there  was  no  contract,  but  that  there  is  no  fact  from  which  a  contract  can 
be  implied,  and  that  if  the  allegations  are  true,  the  cause  of  action  was 
not  one  for  which  the  defendant,  according  to  the  provisions  of  the  statute, 
could  not  be  arrested.  Nor  is  there  any  fact  stated  in  the  judgment  roll 
which  aids  or  strengthens  the  affidavit.  There  is  nothing  in  the  complaint 
or  findings  to  indicate  that  the  cause  of  action  was  a  contract  express  or 
implied,  and  upon  the  hearing  before  the  respondent  after  the  arrest  of 
the  defendant,  he  so  held,  saying:  "In  looking  at  the  judgment  roll  it  is 
plain  that  the  warrant  herein  should  not  have  been  granted,  for  the  de- 
fendant could  have  been  arrested  in  that  original  action,  and  if  so  he  can- 
not be  prosecuted  under  "  the  act  to  abolish  imprisonment  for  debt." 

And  the  learned  judge  who  delivered  the  opinion  of  the  General  Term 
upon  the  first  review,^  says :  "  The  complaint  in  the  receiver's  action 
neither  set  forth  in  terms,  nor  in  any  manner  alluded  to  any  contract 
existing  between  himself  or  the  judgment  debtor,  and  the  defendant 
Dusenbury,  either  as  a  basis  of  the  liability  desired  to  be  enforced  and 
maintained,  or  otherwise,"  but  upholds  the  jurisdiction  of  the  judge  upon 
the  ground  that  "  from  the  facts,  imperfectly  stated  in  the  complaint  as 
they  were,  it  could  readily  be  seen  that  an  implied  contract  existed  in  law 
for  the  payment  of  the  moneys  received  by  the  defendant  Dusenbury,  to 
the  receiver,  in  case  he  had  no  right  to  receive  and  hold  them  upon  the 
ground  claimed  by  him."  We  cannot  agree  with  the  learned  judge  in  this 
construction  of  the  statute.  On  the  contrary  we  think  that  the  express 
contract  referred  to  in  the  statute  is  one  which  has  been  entered  into  by 
the  parties,  and  upon  which  if  broken  an  action  will  lie  for  damages,  or  is 
implied,  when  the  intention  of  the  parties,  if  not  expressed  in  words,  may 
be  gathered  from  their  acts  and  from  surrounding  circumstances ;  and  in 
either  case  must  be  the  result  of  the  free  and  bona  fide  exercise  of  the  will, 
producing  the  aggregatio  mentium,  the  joining  together  of  two  minds,  es- 
sential to  a  contract  at  common  law.  There  is  a  class  of  cases  where  the 
law  prescribes  the  rights  and  liabilities  of  persons  who  have  not  in  reality 
entered  into  any  contract  at  all  with  one  another,  but  between  whom  cir- 
cumstances have  arisen  which  make  it  just  that  one  should  have  a  right, 
1  3  Barb.  187.  *  12  Hun,  70. 


SECT.  I.]  THE   PEOPLE   V.   GILBERT   M.   SPEIR.  21 

and  the  other  should  be  subject  to  a  liability,  similar  to  the  rights  and  lia- 
bilities in  certain  cases  of  express  contract.  Thus,  if  one  man  has  ob- 
tained money  from  another,  through  the  medium  of  oppression,  imposition, 
extortion,  or  deceit,  or  by  the  commission  of  a  trespass,  such  money  may 
be  recovered  back,  for  the  law  implies  a  promise  from  the  wrong-doer  to 
restore  it  to  the  rightful  owner,  although  it  is  obvious  that  this  is  the  very 
opposite  of  his  intention.  Implied  or  constructive  contracts  of  this  nature 
are  similar  to  the  constructive  trusts  of  courts  of  equity,  and  in  fact  are 
not  contracts  at  all.^  And  a  somewhat  similar  distinction  is  recognized  in 
the  civil  law,  where  it  is  said  :  "  In  contracts  it  is  the  consent  of  the  con- 
tracting parties  which  produces  the  obligation  ;  in  quasi-contracts  there  is 
not  any  consent.  The  law  alone,  or  natural  equity  produces  the  obligation 
by  rendering  obligatory  the  fact  from  which  it  results.  Therefore  these 
facts  are  called  quasi-contracts,  because  without  being  contracts,  they  pro- 
duce obligations  in  the  same  manner  as  actual  contracts."  ^  And  again  at 
common  law  says  Blackstone:^  "If  any  one  cheats  me  with  false  cards,  or 
■dice,  or  by  false  weights  or  measures,  or  by  selling  me  one  commodity  for 
another,  an  action  on  the  case  lies  against  him  for  damages,  upon  the  con- 
tract which  the  law  implies  that  every  transaction  is  fair  and  honest."  So 
if  money  is  stolen,  its  owner  may  sue  the  thief  for  conversion  ;  doubtless 
he  may  sue  him  for  money  had  and  received  to  his  use,  but  in  either  of 
these  cases  could  it  be  claimed  that  the  wrong-doer  was  within  the  pro- 
tection of  the  act  passed  to  abolish  imprisonment  for  debt,  or  that  the  con- 
tract implied  by  law  was  the  contract  specified  in  the  first  section  of  that 
act  1  Surely  not.  And  to  that  class  the  present  case  belongs.  The  court 
below  expressly  puts  the  obligation  upon  the  mere  authority  of  the  law, 
and  makes  a  contract  "  by  force  of  natural  equity."     The  learned  judge 

^  Addison  on  Contracts,  22, 

2  1  Poth.  Ob.  113. 

It  remains  to  consider  the  development  of  Indebitatus  Assimpsit  as  a  remedy  upon 
quasi-contracts,  or,  as  thej-  have  been  commonly  called,  contracts  imi)lied  in  law.  The 
contract  implied  in  fact,  as  we  have  seen,  is  a  true  contract.  But  the  obligation  created 
by  law  is  no  contract  at  all.  Neither  mutual  assent  nor  consideration  is  essential  to  its 
validity.  It  is  enforced  regardless  of  the  intention  of  the  obligor.  It  resembles  the  true 
contract,  however,  in  one  important  particular.  The  duty  of  the  obligor  is  a  positive 
one,  that  is,  to  act.  In  this  respect  they  both  differ  from  obligations,  the  breach  of 
which  constitutes  a  tort,  where  the  duty  is  negative,  that  is,  to  forbear.  Inasnuich  as 
it  has  been  customary  to  regard  all  obligations  as  arising  either  ex  cmtractu  or  ex  deUdo^ 
it  is  readily  seen  why  obligations  created  by  law  should  have  been  treated  as  contracts. 
These  constructive  duties  are  more  aptly  defined  in  the  Roman  law  as  obligations  qiuisi, 
ex  cmitradu  than  by  our  ambiguous  "  implied  contracts."  (In  Finch,  Law,  150,  they  are 
called  "as  it  were"  contracts.)  Quasi-contracts  are  founded  (1)  upon  a  record,  (2)  upon 
a  statutory,  official,  or  customary  duty,  or  (3)  upon  the  fundamental  principle  of  justice 
that  no  one  ought  unjustly  to  enrich  himself  at  the  expense  of  another.-— Ames,  Th*. 
History  nf  Assumpait.,  2  Harvard  Law  Itcvicw,  63,  64.  — Ed. 

8  3  Bl.  Com.  165. 


22  THE   PEOPLE   V.    GILBERT   M.    SPEIR.  [CHAP.  I. 

says:  "The  law  implied  a  promise  to  pay  over,  as  the  judgment  directed 
that  to  be  done."  So  obligations  are  created  in  consequence  of  frauds  or 
negligence,  and  in  either  case  the  law  compels  reparation,  and  permits  the 
tort  to  be  waived,  but  there  is  no  contract.  That  can  only  come  from  a 
convention  or  agreement  of  two,  not  by  the  option  or  at  the  election  of 
one.  In  the  case  before  us  there  is  not  even  an  election,  for  the  complaint 
states  no  contract,  nor  charges  any  assumpsit. 

It  is  also  claimed  by  the  respondent's  counsel  that  inasmuch  as  the  judg- 
ment declares  the  assignment  under  which  the  defendant  claimed  the 
money  in  question  to  be  void,  therefore  Dusenbury  must  be  deemed  to 
have  fraudulently  incurred  the  obligation  for  which  the  action  was  brought, 
but  that  position  is  subject  to  the  objection  l)efore  mentioned  ;  in  that  the 
debt  or  obligation  spoken  of  in  the  act  of  1831  means  a  contract  resulting 
from  the  voluntary  arrangement  of  the  parties,  and  not  one  implied  by 
law  for  the  purpose  of  giving  a  remedy  for  a  wrong  suffered. 

That  the  debt  or  obligation  was  fraudulently  incurred  is  one  of  the  par- 
ticulars which,  proved  to  exist,  permits  the  judge  to  issue  the  warrant; 
but  it  must  be  remembered  that  in  an  action  for  the  recovery  of  a  debt,  no 
arrest  can  be  had,  and  it  is  mere  evasion  to  say  the  defendant  violated  the 
injunction ;  imposed  upon  the  court ;  made  a  claim  under  a  fictitious  as- 
signment;  and  so,  having  wrongfully  obtained  the  money,  he  refuses  to 
pay  it  over,  but  the  law  says  he  ought  to,  therefore  he  shall  be  deemed  to 
have  promised,  hence  you  may  sue  on  that  assumpsit,  but  3'ou  cannot 
arrest  because  the  non-imprisonment  act  says  you  shall  not  in  an  action  on 
contract.  Therefore  you  set  out  in  an  affidavit  the  very  frauds  in  conse- 
quence of  which  the  law  implied  the  contract,  and  demand  the  arrest  of  the 
defendant.  It  is  verj'^  clear  that  an  action  for  wrongs  to  persons,  or  to 
their  property ;  actions  of  trover  or  trespass,  or  replevin,  are  not  within 
the  section,  for  they  do  not  arise  on  contract.  The  party  wronged  cannot 
by  waiving  the  tort  make  a  contract,  and  then  resort  to  the  fact  which 
constituted  the  tort  as  a  ground  of  arrest.  Fassett  v.  Tallmadge,^  was  an 
action  similar  to  the  one  upon  which  these  proceedings  are  based,  to  set 
aside  a  conveyance  made  by  a  debtor  of  the  plaintiff  to  the  defendant  Tall- 
madge,  on  the  ground  that  it  was  fraudulent  and  void  as  to  creditors ;  it 
was  so  held,  and  the  defendant  was  ordered  to  pay  to  a  receiver  appointed 
by  the  court  a  sum  of  money  for  the  property  received  by  him.  In  con- 
sidering whether  he  was  liable  to  be  imprisoned,  the  court  say  :  "The  first 
section  of  the  act  to  abolish  imprisonment  for  debt,  and  the  one  hundred 
and  seventy-ninth  section  of  the  Code,  fourth  subdivision,  are  expressly 
confined  in  their  operation  to  cases  of  contract,  or  in  which  the  debt  is 
contracted,  or  an  obligation  is  incurred.  Neither  of  them  apply  to  a  case 
like  the  present,  where  the  action  is  a  proceeding  in  equity  to  set  aside  a 
conveyance  or  assignment  of  personal  property." 

1  37  Barb.  436. 


SECT.  I.]  STATE   OF   LOUISIANA  V.   NEW   ORLEANS.  23 

As  the  complaint  stated  no  cause  of  action  upon  contract,  and  as  the 
affidavit  presented  to  the  judge  contained  no  statement  or  assertion  tend- 
ing to  establish  a  contract  express  or  implied  as  the  basis  of  the  judgment, 
but  on  the  contrary  an  action  to  recover  the  fund  on  the  gi-ouud  of  its 
unlawful  appropriation  or  conversion  by  the  defendant,  showing  misfeas- 
ance or  malfeasance  on  his  part,  rather  than  a  contract  liability,  the  case 
is  not  within  the  statute. 

Many  other  questions  are  raised  by  the  appellant's  points,  but  as  the 
conclusion  to  which  we  have  arrived  in  regard  to  the  one  above  mentioned 
goes  to  the  foundation  of  the  proceedings,  it  is  unnecessary  to  discuss 
them. 

The  order  of  the  General  Term  should  be  reversed,  and  the  warrant  of 
Judge  Speir  for  the  arrest  of  the  relator,  dated  14th  of  November,  1876, 
and  all  subsequent  proceedings  thereunder,  vacated  and  set  aside. 

All  concur,  except  Miller,  J.,  absent  at  argument. 

Ordered  accordingly. 


STATE    OF    LOUISIANA    ex    rel    FOLSOM    v.    MAYOR    AND 
ADMINISTRATORS   OF   NEW  ORLEANS. 

In  the  Supreme  Court  of  the  United  States,  November  19,  1883. 
[Reported  in  100  United  States  Reports,  285.] 

Mandamus  prayed  for  in  the  Supreme  Court  of  Louisiana  to  the  city 
authorities  of  New  Orleans,  to  compel  them  to  levy  taxes  and  pay  a 
judgment  recovered  by  the  relator.  The  prayer  being  denied,  the  decision 
was  brought  here  on  error  for  review,  on  the  ground  of  repugnancy  to  the 
Constitution  and  laws  of  the  United  States.  The  facts  appear  in  the 
opinion  of  the  court. 

Mr.  Thomas  J.  Semmes  for  the  plaintiffs  in  error. 

Mr.  W.  F.  Morris  for  the  defendants  in  error. 

Mr.  Justice  Field  delivered  the  opinion  of  the  court. 

The  relators  are  the  holders  of  two  judgments  against  the  city  of  New 
Orleans,  one  for  $26,850,  the  other  for  $2,000.  Both  were  recovered  in 
the  courts  of  Louisiana  :  the  first  in  June,  1877,  by  the  relators  ;  the 
second  in  June,  1874,  by  parties  who  assigned  it  to  them.  Both  judgments 
were  for  damages  done  to  the  property  of  the  plaintiffs  therein  by  a  mob 
or  riotous  assemblage  of  people  in  the  year  1873.  A  statute  of  the  State 
made  municipal  corporations  liable  for  damages  thus  caused  within  their 
limits.     Rev.  Stats,  of  La.,  1870,  sect.  2453. 

The  judgments  were  duly  registered  in  the  office  of  the  comptroller  of 
the  city,  pursuant  to  the  provisions  of  the  act  known  as  No.  5  of  the 
extra  session  of  1870,  and  the  present  proceeding  was  taken  by  the  relators 


24  STATE    OF   LOUISIANA   V.   NEW   ORLEANS.  [CHAP.  L 

to  compel  the  authorities  of  the  city  to  provide  for  their  payment.  At 
the  time  the  injuries  complained  of  were  committed,  and  one  of  the  judg- 
ments was  recovered,  the  city  of  New  Orleans  was  authorized  to  levy  and 
collect  a  tax  upon  propei-ty  within  its  limits  of  one  dollar  and  seventy-five 
cents  upon  every  one  hundred  dollars  of  its  assessed  value.  At  the  time 
the  other  judgment  was  recovered  this  limit  of  taxation  was  reduced  to 
one  dollar  and  fifty  cents  on  every  one  hundred  dollars  of  the  assessed 
value  of  the  property.  By  the  Constitution  of  the  State,  adopted  in  1879, 
the  power  of  the  city  to  impose  taxes  on  property  within  its  limits  was 
further  restricted  to  ten  mills  on  the  dollar  of  the  valuation. 

The  effect  of  this  last  limitation  is  to  prevent  the  relators,  who  are  not 
allowed  to  issue  executions  against  the  city,  from  collecting  their  judgments, 
as  the  funds  receivable  from  the  tax  thus  authorized  to  be  levied  are 
exhausted  by  the  current  expenses  of  the  city,  which  must  first  be  met. 

The  relatoi's  sought  in  the  State  courts  to  compel  a  levy  by  the  city  of 
taxes  to  meet  their  judgments  at  the  rate  permitted  when  the  damages 
were  done  for  which  the  judgments  were  obtained.  They  contended  that 
the  subsequent  limitation  imposed  upon  its  powers  violated  that  clause  of 
the  federal  Constitution  which  prohibits  a  State  from  passing  a  law  im- 
pairing the  obligation  of  contracts,^  and  also  that  clause  of  the  Fourteenth 
Amendment  which  forbids  a  State  to  deprive  any  person  of  life,  liberty,  or 
property  without  due  process  of  law.  The  supreme  court  of  the  State, 
reversing  the  lower  court,  decided  against  the  relators,  and  the  same 
contention  is  renewed  here. 

The  right  to  reiiubursement  for  damages  caused  by  a  mob  or  riotous 
assemblage  of  people  is  not  founded  upon  any  contract  between  the  city 
and  the  sufferers.  Its  liability  for  the  damages  is  created  by  a  law  of  the 
legislature,  and  can  be  withdrawn  or  limited  at  its  pleasure.  Municipal 
corporations  are  instrumentalities  of  the  State  for  the  convenient  adminis- 
tration of  government  within  their  limits.  They  are  invested  with  authority 
to  establish  a  police  to  guard  against  disturbance ;  and  it  is  their  duty  to 
exercise  their  authority  so  as  to  prevent  violence  from  any  cause,  and 
particularly  from  mobs  and  riotous  assemblages.  It  has,  therefore,  been 
generally  considered  as  a  just  burden  cast  upon  them  to  require  them  to 
make  good  any  loss  sustained  from  the  acts  of  such  assemblages  which 
they  should  have  repressed.  The  imposition  has  been  supposed  to  create, 
in  the  holders  of  property  liable  to  taxation  within  their  limits,  an  interest 
to  discourage  and  prevent  any  movements  tending  to  such  violent  proceed- 
ings. But,  however  considered,  the  imposition  is  simply  a  measure  of 
legislative  policy,  in  no  respect  resting  upon  contract,  and  subject,  like  all 
other  measures  of  policy,  to  any  change  the  legislature  may  see  fit  to  make, 
either  in  the  extent  of  the  liability  or  in  the  means  of  its  enforcement. 
And  its  character  is  not  at  all  changed  by  the  fact  that  the  amount  of  loss, 

^  Only  so  much  of  tlie  opinion  is  given  as  relates  to  this  question.  —  Ed. 


SECT.  I.]  STATE    OF   LOUISIANA   V.   NEW   ORLEANS.  25 

in  pecuuiary  estimation,  has  been  ascertained  and  established  by  the  judg- 
ments rendered.  The  obligation  to  make  indemnity  created  by  the  statute 
has  no  more  element  of  contract  in  it  because  merged  in  the  judgments 
than  it  had  previously.  The  term  "contract"  is  used  iu  the  Constitution 
in  its  ordinary  sense,  as  signifying  the  agreement  of  two  or  more  minds,  for 
considerations  proceeding  from  one  to  the  other,  to  do,  or  not  to  do,  certain 
acts.     ^Mutual  assent  to  its  terms  is  of  its  very  essence. 

A  judgment  for  damages,  estimated  in  money,  is  sometimes  called  by 
text  writers  a  specialty  or  contract  of  record,  because  it  establishes  a  legal 
obligation  to  pay  the  amount  recovered  ;  and,  by  a  fiction  of  law,  a  promise 
to  pay  is  implied  where  such  legal  obligation  exists.  It  is  on  this  principle 
that  an  action  ex  contractu  will  lie  upon  a  judgment.^  But  this  fiction 
cannot  convert  a  transaction  wanting  the  assent  of  parties  into  one  which 
necessarily  implies  it.  Judgments  for  torts  are  usually  the  result  of  vio- 
lent contests,  and,  as  observed  by  the  court  below,  are  imposed  upon  the 
losing  party  by  a  higher  authority  against  his  will  and  protest.  The 
prohibition  of  the  federal  Constitution  was  intended  to  secure  the  observ- 
ance of  good  faith  iu  the  stipulation  of  parties  against  any  State  action. 
Where  a  transaction  is  not  based  upon  any  assent  of  parties,  it  cannot 
be  said  that  any  faith  is  pledged  with  respect  to  it  ;  and  no  case  arises 
for  the  operation  of  the  prohibition.  Garrison  v.  City  of  New  York.^ 
There  is,  therefore,  nothing  in  the  liabilities  of  the  city  by  reason  of  which 
the  relators  recovered  their  judgments  that  precluded  the  State  from 
changing  the  taxing  power  of  the  city,  even  though  the  taxation  be  so 
limited  as  to  postpone  the  payment  of  the  judgments. 

Judgment  affirmed? 

Mr.  Justice  Harlan  dissenting. 

By  the  Constitution  of  Louisiana  adopted  in  1879,  and  which  went  into 
effect  January  1st,  1880,  it  is  declared  "no  parish  or  municipal  tax,  for  all 
purposes  whatever,  shall  exceed  ten  mills  on  the  dollar  of  valuation." 

The  judgments  held  by  plaintiff  iu  error  against  the  city  of  New  Orleans 
were  rendered  and  became  final  long  before  the  adoption  of  that  constitu- 
tional provision.  At  the  time  of  their  rendition,  the  law  forbade  execution 
against  the  defendant,  but  the  city  had  the  power,  and  was  under  a  duty, 
which  the  courts  could  compel  it  to  discharge,  to  include  in  its  budget  or 
annual  estimate  for  contingent  expenses,  a  sum  sufficient  to  pay  these 
judgments.  At  that  time,  also,  the  rate  of  taxation  prescribed  by  law  was 
ample  to  enable  the  city  to  meet  all  such  obligations.  But  if  the  limitation 
upon  taxation  imposed  by  the  State  Constitution  be  applied  to  the  judg- 
ments in  question,  then,  it  is  conceded,  the  city  cannot  raise  more  money 
than  will  be  required  to  meet  the  ordinary  and  necessary  expenses  of 
municipal  administration.     Conseijuently  under  the  limit  of  ten  mills  on 

1  Chitty  on  Contracts,  Perkins'  Ed.  87.  *  oi  Wall.  203. 

'  Mr.  Justice  Ukauley  delivered  a  concurring  opinion.  —  Eu. 


26  STATE   OF   LOUISIANA  V.   NEW   ORLEANS.  [CHAP.  I. 

the  dollar  of  valuation,  the  judgments  of  plaintiffs  become  as  valueless  as 
they  would  be,  had  the  State  Constitution,  in  terms,  forbidden  the  city  from 
paying  them. 

1.  Are  the  judgments  in  question  contracts  1  ^  This  question  is  answered 
by  the  Court  of  Appeals  of  New  Yoi'k,  speaking  by  Woodruff,  J.,  in  Taylor 
V.  Root.'^     It  is  there  said  :  — 

"  Contracts  are  of  three  kinds :  Simple  contracts,  contracts  by  specialty,  and 
contracts  of  record.  A  judgment  is  a  contract  of  the  highest  nature  known  to  the 
law.  .  .  .  The  cause  or  consideration  of  the  judgment  is  of  no  possible  i:iiportance ; 
that  is  merged  in  the  judgment.  When  recovered,  the  judgment  stands  as  a  con- 
clusive declaration  that  the  plaintiff  therein  is  entitled  to  the  sum  of  money 
recovered.  No  matter  what  may  have  been  the  original  cause  of  action,  the 
judgment  forever  settles  the  plaintiff's  claim  and  the  defendant's  assent  thereto  ; 
this  assent  may  have  been  reluctant,  but  in  law  it  is  an  assent,  and  the  defendant 
is  estopped  by  the  judgment  to  dissent.  Forever  thereafter,  any  claim  on  the 
judgment  is  setting  up  a  cause  of  action  on  contract." 

Blackstone  says  that  **  when  any  specific  sum  is  adjudged  to  be  due  from 
the  defendant  to  the  plaintiff  on  an  action  or  suit  at  law,  this  is  a  contract 
of  the  highest  nature,  being  established  by  the  sentence  of  a  court  of  judi- 
cature." ^  Chitty  enumerates  judgments  among  contracts  or  obligations 
of  record,  and  observes  that  they  "are  of  superior  force,  because  they  have 
been  promulgated  by,  or  are  founded  upon,  the  authority  and  have  received 
the  sanction  of  a  court  of  record."  *  An  action  in  form  ex  contractu  will 
lie  on  a  judgment  of  a  court  of  record,  because  the  law  implies  a  contract 
to  pay  it  from  the  fact  of  there  being  a  legal  obligation  to  do  so,  "although," 
says  Chitty,  "the  transaction  in  its  origin  was  totally  imconuected  with 
contract,  and  there  has  been  no  promise  in  fact."  ^ 

It  seems  to  me  that  these  judgments  are  contracts,  within  any  reasonable 
interpretation  of  the  contract  clause  of  the  national  Constitution.  It  can 
hardly  be  that  the  framers  of  that  instrument  attached  less  consequence 
to  contracts  of  record  than  to  simple  contracts.  If  this  view  be  correct, 
then  the  withdrawal  from  the  city  of  New  Orleans  of  the  authority  which 
it  possessed  when  they  were  rendered,  to  levy  taxes  sufficient  for  their 
payment,  impaired  the  obligation  of  the  contracts  evidenced  by  those 
judgments. 

1  Only  so  much  of  the  opinion  is  given  as  relates  to  this  question.  —  Ed. 

2  4  Keyes,  Ui.  ^  3  Bl.  Com.  465.  *  Chitty  on  Contracts,  3. 
6  Id.  87. 


SECT.  I.]  MILFORD   V.    COMMONWEALTH.  27 


INHABITANTS   OF  MILFORD   v.  COMMONWEALTH. 

In  the  Supreme  Judicial  Court  of  Massachusetts,  February  26   1887. 
[Reported  in  144  ifassachusetts  Reports,  64.] 

Petition  to  the  Superior  Court,  uuder  the  Pub.  Stats,  c.  1 95,  to  recover 
for  the  support  of  Susan  Touhcy,  alleged  to  have  been  a  State  pauper,  who 
fell  into  distress  in  Milford,  and  who  was  not  able  to  be  removed  to  the 
State  almshouse. 

At  the  trial  before  Knowltox,  Mason,  and  Barker,  JJ.,  the  petitioner's 
evidence  tended  to  show  that  said  Susan  was  a  State  pauper,  and  that  she 
•was  in  need  of  relief,  and  was  properly  supported  by  the  petitioner,  under 
the  provisions  of  the  Pub.  Stats,  c.  86,  §  25,  at  the  cost  stated  in  the 
account  annexed  to  the  petition. 

The  court  found  as  a  fact  that  no  express  contract  was  made  by  the 
respondent  for  the  board  of  the  pauper  named  in  the  petition,  but  that 
whatever  was  said  by  the  agent  of  the  Commonwealth  was  with  reference 
merely  to  the  amount  of  the  allowance  to  be  made,  under  the  statute,  upon 
the  bills  of  the  town  of  Milford,  presented  in  accordance  with  the  provisions 
of  the  Pub.  Stats,  c.  86,  §  26. 

The  court  ruled,  as  matter  of  law,  that  the  claim  of  a  town  for  reimburse- 
ment under  said  §  26  was  not  a  claim  founded  upon  contract  for  the  pay- 
ment of  money,  within  the  meaning  of  the  Pub.  Stats,  c.  195,  §  1 ;  and 
found  for  the  respondent.     The  petitioner  alleged  exceptions. 

<S'.  //.  Ti/n(/,  for  the  petitioner. 

//.  If.  Shepard,  Assistant  Attorney  General,  for  the  Commonwealth. 

Field,  J.  The  question  of  law  to  be  decided  is  whether  the  claim  that 
the  Commonwealth  reimburse  to  the  town  the  expenses  incurred  in  the 
support  of  a  State  pauper,  under  the  Pub.  Stats,  c.  86,  f§  25,  26,  is  a  claim 
which  is  founded  upon  a  contract  for  the  payment  of  money,  within  the 
meaning  of  the  Stat,  of  1879,  c.  255  (Pub.  Stats,  c.  195).  See  Stats.  1865, 
c.  162  ;  1869,  c.  12 ;  1879,  c.  291,  §  3. 

The  Court  of  Claims  of  the  United  States,  under  statutes  w-hich  give  it 
jurisdiction  to  hear  and  determine  "all  claims  founded  upon  any  law  of 
Congress,  ...  or  upon  any  contract,  expressed  or  implied,  with  the  govern- 
ment of  the  United  States,"  etc.,  has  heard  and  determined  claims  for 
salaries  or  pay  established  by  a  law  of  the  United  States,  and  these  have 
been  sometimes  spoken  of  as  claims  founded  on  contract,  aUIiough  it  is  not 
clear  that  they  ought  not  to  be  regarded  as  claims  founded  upon  a  law  of 
the  United  States.     U.  S.  llcw  Stats.  §  1059.     Patton  v.  United  States;^ 

1  7  Ct.  of  CI.  3C2,  371. 


28  MILFORD   V.    COMMONWEALTH.  [clfAP.  L 

French  v.  United  States ;  ^  Collins  v.  United  States ;  ^  Mitchell  v.  United 
States  ;  ^  United  States  v.  Langston.* 

In  matters  of  procedure,  penalties  have  usually  been  regarded  as  debts. 
In  the  Pub.  Stats,  c.  167,  §  1,  actions  for  penalties  are  excluded  from  actions 
of  contract,  and  are  included  in  actions  of  toi't,  but  actions  under  statutes 
to  recover  for  money  expended  have  usually  been  actions  of  contract.  New 
Salem  V.  Wendell;^  Oakham  v.  Sutton;®  Amherst  v.  Shelburne /  Wenham 
V.  Essex. ^ 

The  law  regards  the  money  as  expended  at  the  implied  request  of  the 
defendant,  and  a  promise  to  pay  the  money  is  said  to  be  implied  from  the 
liability  created  by  the  statute.  A  contract  may  be  expressly  made,  or  a 
contract  may  be  inferred  or  implied  when  it  is  found  that  there  is  an  agree- 
ment of  the  parties  and  an  intention  to  create  a  contract,  although  that 
intention  has  not  been  expressed  in  terms  of  contract ;  in  either  case,  there 
is  an  actual  contract.  But  a  contract  is  sometimes  said  to  be  implied  when 
there  is  no  intention  to  create  a  contract,  and  no  agreement  of  parties,  but 
the  law  has  imposed  an  obligation  which  is  enforced  as  if  it  were  an  obliga- 
tion arising  ex  contractu.  In  such  a  case,  there  is  not  a  contract,  and  the 
obligation  arises  ex  lege. 

We  are  of  opinion  that  the  Stat,  of  1879,  c.  255,  was  not  intended  to 
give  to  the  Superior  Court  jurisdiction  over  obligations  for  the  payment  of 
money  imposed  by  statute  upon  the  Commonwealth.  There  are  many  such 
obligations,  but  they  are  not  within  any  of  the  definitions  of  a  contract,  all 
of  which  requii-e  a  consent  or  agreement  of  the  parties.  These  statutory 
obligations  are  performed  by  the  various  officers  of  the  Commonwealth,  or 
by  the  Legislature.  In  one  case,  at  least,  there  is  a  remedy  by  a  petition 
in  the  nature  of  a  petition  of  right,  to  be  filed  in  the  Supreme  Judicial 
Court.  Pub.  Stats,  c.  13,  §  64.  In  most  cases,  however,  no  judicial 
remedy  against  tlie  Commonwealth  has  been  provided,  and  the  Common- 
wealth cannot  be  sued  in  its  own  courts  without  clear  statutory  authority. 

We  think  that  the  Pub.  Stats,  c.  195,  must  be  confined  to  actual  contracts 
made  by  the  Commonwealth  for  the  payment  of  money,  and  we  are  not 
now  required  to  determine  whether  they  must  be  express  contracts. 

Exceptions  overruled. 

1  16  Ct.  of  CI.  419.  2  15  Ct.  of  CI.  22. 

8  18  Ct.  of  CI.  281 ;  s.  c.  109  F.  S.  1  *  118  U.  S.  389. 

6  2  Pick,  341.  6  13  Met.  192  '  11  Gray,  107  8  io3  Mass.  117. 


SECT.  :l]  PERKINSON   v.   GILFORD   AND   OTHERS.  29 


SECTION  n. 

WHEREIN    IT   DIFFERS    FROM   TORT. 


PERKIXSON  V.  GILFORD   and   Others. 
In  the  King's  Bench,  Easter  Term,  1640. 

[Reported  in  Croke,  Charles,  539.] 

Debt  against  Gilford  and  others,  executors  of  William  Collier,  Esq.,  late 
slieriflf  of  the  county  of  Dorset,  for  two  and  twenty  pounds  ten  shillings. 
Whereas  the  plaintiff  had  recovered  in  the  Common  Pleas  against  the 
executor  of  William  Pawlett  a  debt  of  one  hundred  pounds,  and  two  and 
twenty  pounds  ten  shillings  for  damages,  the  debt  and  damages  de  bonis 
testatoris,  si,  d-c;  et  si  non,  the  said  two-and-twenty  pounds  ten  shillings  de 
bonis  propriis  ;  and  the  record  being  removed  into  this  court,  the  plaintiff 
had  a.  fieri  facias  directed  to  the  said  William  Collier,  sheriff  of  Dorset,  for 
the  levying  of  the  said  two-and-twenty  pounds  ten  shillings  damages  of  the 
goods  of  the  said  executor  :  and  by  virtue  thereof  he  levied  the  said  two- 
and-twenty  pounds  ten  shillings,  and  afterwards  died  without  paying,  etc.  ; 
whereupon  he  demanded  it  of  the  said  executors,  and  they  had  not  paid  it, 
per  quod  actio  accrevit.  The  defendants  pleaded  non  debet ;  and  found 
against  them. 

Mallet  moved  in  arrest  of  judgment, 

The  Fourth  Objection,^  Tiiat  although  the  action  lies  against  the 
sheriff  himself,  yet  it  lies  not  against  his  executors ;  for  the  non-payment 
is  a  personal  wrong,  wherewith  his  executors  are  not  chargeable,  as  debt 
upon  an  escape  lies  not  against  a  sheriff's  executors. 

But  Berkley,  Jones,  and  myself  (Brampston  being  absent)  agreed,  that 
the  action  well  lies.  And  for  the  fourth  objection  they  held,  that  the 
sheriff's  executors  are  as  well  chargeable  as  himself:  for,  as  Jones  said, 
there  is  a  diversity  where  the  sheriff  is  chargeable  in  his  life  for  a  personal 
tort  or  misfeasance ;  there  his  person  is  only  chargeable,  and  there  actio 
moritur  cum  persona :  but  where  he  is  chargeable  for  levying  of  money,  and 
not  paying  it  over,  that  is  for  a  duty ;  and  there,  if  he  dies,  his  executors 
are  chargeable  as  well  as  himself;  which  is  the  reason,  that  for  an  escape 
by  the  sheriff  his  executors  are  not  chargeable  :  but  there  would  be  great 
mischief  if  the  sheriff's  executors  should  not  be  liable  in  this  case ;  for  the 
plaintiff  had  a  duty  due  to  him  from  the  executors  of  Pawlett  the  first 
1  Only  so  much  of  the  case  is  given  as  relates  to  this  ohjection.  —  Kd. 


30  HAMBLY   V.   TKOTT.  [CHAP.  I. 

defendant,  who  paid  it  to  the  sheriff,  and  thereby  was  discharged  thereof: 
and  if  the  plaintiff  should  not  recover  it  against  the  sheriff's  executors,  he 
sliould  be  without  remedy,  which  the  law  will  not  suffer.  Wherefore  they 
all  agreed,  that  the  action  well  lay.  And  rule  was  given  to  have  judgment 
entered,  unless,  &c. 


HAMBLY  AND  Another,  Assignees  of  MOO^  v.  TEOTT,  Administrator. 
In  the  King's  Bench,  Hilary  Term,  1676, 

[Reported  in  Covjper,  371.] 

In  trover  against  an  administrator  cum  testamento  annexo,  the  declara- 
tion laid  the  conversion  by  the  testator  in  his  lifetime.  Plea,  that  the 
testator  was  not  guilty.     Verdict  for  the  plaintiff. 

Mr.  Kerhy  had  moved  in  arrest  of  judgment  upon  the  ground  of  this 
being  a  personal  tort,  which  dies  with  the  person ;  upon  the  authority  of 
Collins  V.  Fennerell,^ and  had  a  rule  to  shew  cause. 

Mr.  Buller  last  term  shewed  cause.  —  The  objection  made  to  the  plain- 
tiff's title  to  recover  in  this  case  is  founded  upon  the  old  maxim  of  law 
which  says,  actio  j^cfsonalis  inoritur  cum  persona.  But  that  objection  does 
not  hold  here  ;  nor  is  the  maxim  applicable  to  all  personal  actions  ;  if  it 
were,  neither  debt  nor  assumpsit  would  lie  against  an  executor  or  adminis- 
trator. If  it  is  not  applicable  to  all  personal  actions,  there  must  be  some 
restriction ;  and  the  true  distinction  is  this ;  where  the  action  is  founded 
merely  upon  an  injury  done  to  the  person,  and  no  property  is  in  question, 
there  the  action  dies  with  the  person,  as  in  assault  and  battery,  and  the 
like.  But  where  property  is  concerned,  as  in  this  case,  the  action  remains 
notwithstanding  the  death  of  the  party. 

Trover  is  not  like  trespass,  but  lies  in  a  variety  of  cases  where  a  party 
gets  the  possession  of  goods  lawfully.  It  is  founded  solely  in  property, 
and  the  value  of  the  goods  only  can  be  recovered.  Therefore,  the  damages 
are  as  certain  as  in  any  action  of  assumpsit.  As  to  the  case  of  Collins  v. 
Fennerell,  it  is  a  single  authority  and  was  not  argued  ;  therefore,  most 
probal)ly  was  determined  simply  on  the  old  maxim.  But  Savile  40,  case 
90,  is  directly  the  other  way. 

Where  the  damages  are  merely  vindictive  and  uncertain,  an  action  will 
not  lie  against  an  executor  ;  but  where  the  action  is  to  recover  property, 
there  the  damages  are  certain,  and  the  rule  does  not  hold.  This  is  an  action 
for  sheep,  goats,  pigs,  oats,  and  cyder  converted  by  injustice  to  the  use  of 
the  person  deceased ;  therefore,  this  action  does  not  die  with  the  person. 

1  Triu.  22,  23,  Geo.  2,  B.  R. 


SECT.  II.]  HAMBLY   V.   TROTT.  31 

Mr.  Kerby  contm  for  the  defendant  cited  Carter  v.  Fossett,^  where  Jones, 
Justice,  said,  "  that  when  the  act  of  the  testator  includes  a  tort,  it  does  not 
extend  to  the  executor  ;  but  being  personal  dies  with  him;  as  trover  and 
conversion  does  not  lie  against  au  executor  for  trover  fait  par  Iki/." 
Collins  V.  Fennerell,  above  cited. 

Here,  the  goods  came  to  the  hands  of  the  testator,  and  he  converted 
them  to  his  own  use.  Trover  is  an  action  of  tort,  and  conversion  is  the 
gist  of  the  action.  No  one  is  answerable  for  a  tort  but  he  who  commits 
it ;  consequently  this  action  can  only  be  maintained  against  the  person 
guilty  of  such  conversion.  But  here  the  convei-sion  is  laid  to  be  by  the 
testator.  Therefore  the  judgment  must  be  arrested.  The  distinction  that 
has  been  taken  in  the  books  is,  that  the  action  may  be  maintained  by  au 
executor  but  not  against  him.  Hughes  v.  Robotham    ;  Le  Mason  v.  Dixon.' 

Lord  Mansfield.  If  this  case  depends  upon  the  rule,  actio  personalis 
vioritur  cum  pej-sona,  at  present  only  a  dictum  has  been  cited  in  support,  of 
the  argument.  Trover  is  in  form  a  tort,  but  in  substance  an  action  to  try 
property. 

Mr.  Kerhy.  The  executor  is  answerable  for  all  contracts  of  the  testator, 
but  not  for  torts. 

Lord  Mansfield.  The  fundamental  point  to  be  considered  in  this  case 
is,  whether  if  a  man  gets  the  property  of  another  into  his  hands  it  may  be 
recovered  against  his  executors  in  the  form  of  an  action  of  trover,  wheie 
there  is  an  action  against  the  executors  in  another  form.  It  is  merely  a 
distinction  whether  the  relief  shall  be  in  this  form  or  that.  Suppose  the 
testator  had  sold  the  sheep,  etc.,  in  question ;  in  that  case  an  action  for 
money  had  and  received  would  lie.  Suppose  the  testator  had  left  them  in 
specie  to  the  executors,  the  conversion  must  have  been  laid  against  the 
executors.  There  is  no  difficulty  as  to  the  administration  of  the  assets. 
because  they  are  not  the  testator's  own  property.  Suppose  the  testator 
had  consumed  them,  and  had  eaten  the  sheep ;  what  action  would  have 
lain  then  1  Is  the  executor  to  get  off  altogether  \  I  shall  be  very  sorry  to 
decide  that  trover  will  not  lie,  if  there  is  no  other  remedy  for  the  right. 

Aston,  Justice.  Suppose  the  executor  had  had  a  counter  demand  against 
the  plaintiff,  he  could  not  have  set  it  off  in  trover  ;  but  in  an  action  for  money 
had  and  received,  he  might.  If  these  things  had  been  left  by  the  testator 
in  specie,  the  conversion  must  have  been  laid  to  be  by  the  executor.  There 
seems  to  be  but  little  difierence  between  actions  of  trover  and  actions  for 
money  had  and  received.  As  at  present  advised,  I  incline  to  think  trover 
maintainable  in  this  case. 

AsHHUBST,  Justice.  The  maxim  does  not  hold  as  a  universal  proposition, 
because  assumpsit  lies.  As  to  the  case  of  Collins  v.  Fennerell,  all  the  court 
considered  it  as  unargued,  and  given  up  rather  prematiwely  by  Mr.  Henley. 

Lord  Mansfield.     The  criterion  I  go  upon  is  this  :  Can  justice  possibly 

J  Palm.  330.  «  Pophain,  31.  »  Pophani,  139. 


32  HAMBLY   V.   TROTT.  [CHAP.  I. 

be  done  in  any  other  form  of  action  ?     Trover  is  merely  a  substitute  of  the 
old  action  of  detinue. ■*     The  court  ordered  it  to  stand  over. 

Upon  a  second  argument  this  day,  Mr.  Dunning  cited  Cro.  Car.  540 ; 
1  Sid.  88. 

Lord  Mansfield.  Many  difficulties  arise  worth  consideration.  An 
action  of  trover  is  not  now  an  action  ex  maleficio,  though  it  is  so  in  form ; 
but  it  is  founded  in  property.  If  the  goods  of  one  pei\son  come  to  another, 
the  person  who  converts  them  is  answerable.  In  substance,  trover  is  an 
action  of  property.  If  a  man  receives  the  property  of  another,  his  fortune 
ought  to  answer  it.  Suppose  he  dies,  are  the  assets  to  be  in  no  respect  liable  % 
It  will  require  a  good  deal  of  consideration  before  we  decide  that  there  is 
no  remedy. 

Aston,  Justice.  The  rule  is,  quod  orihir  ex  delicto,  non  ex  contractu  shall 
not  charge  an  executor.^  Executors  and  administrators.^  Where  goods 
come  to  the  hands  of  the  executor  in  specie,  trover  will  lie  ;  where  in 
value,  an  action  for  money  had  and  received.  But  the  difficulty  with 
me  is,  that  here  it  does  not  appear  whether  the  goods  came  to  the  hands 
of  the  defendant  in  specie  or  in  value. 

Cur.  advisare  vult. 

Afterwards,  on  Monday,  February  12th,  in  this  term.  Lord  Mansfield 
delivered  the  unanimous  opinion  of  the  court  as  follows  :  — 

This  was  an  action  of  trover  against  an  administrator,  with  the  will 
annexed.  The  trover  and  conversion  were  both  charged  to  have  been  com- 
mitted by  the  testator  in  his  lifetime;  the  plea  pleaded  was,  that  the 
testator  was  not  guilty.  A  verdict  was  found  for  the  plaintiffs,  and  a  mo- 
tion has  been  made  in  arrest  of  judgment,  because  this  is  a  tort,  for  which 
an  executor  or  administrator  is  not  liable  to  answer. 

The  maxim,  actio  personalis  moritur  cum  persona,  upon  which  the  objec- 
tion is  founded,  not  being  generally  true,  and  much  less  universally  so, 
leaves  the  law  undefined  as  to  the  kind  of  personal  actions  which  die  with 
the  person,  or  survive  against  the  executor. 

An  action  of  trover  being  in  form  a  fiction,  and  in  substance  founded  on 
property,  for  the  equitable  purpose  of  recovering  the  value  of  the  plaintift"'s 
specific  property,  used  and  enjoyed  by  the  defendant,  if  no  other  action 
could  be  brought  against  the  executor,  it  seems  unjust  and  inconvenient 
that  the  testator's  assets  should  not  be  liable  for  the  value  of  what  belonged 
to  another  man,  which  the  testator  had  reaped  the  benefit  of. 

We  therefore  thought  the  matter  well  deserved  consideration.  We  have 
carefully  looked  into  all  the  cases  upon  the  subject.  To  state  and  go 
through  them  all  would  be  tedious,  and  tend  rather  to  confound  than 
elucidate.  Upon  the  whole,  I  think  these  conclusions  may  be  drawn  from 
them. 

1  2  Keb.  502  ;  Ventr.  30  ;  Sir  T.  Eaym.  95. 

*  2  Bac.  Abr.  444,  445.  tit.  ^  2  Bac.  Abr.  280.  tit.  Trover. 


SECT.  II.]  HAMBLY  V.  TROTT.  33 

First,  as  to  actions  which  survive  against  an  executor,  or  die  with  the 
person,  on  account  of  the  cause  of  action.  Secondly,  as  to  actions  which 
survive  against  an  executor,  or  die  with  the  person,  on  account  of  the 
foTin  of  action. 

As  to  the  first ;  where  the  cause  of  action  is  money  due,  or  a  contract  to 
be  performed,  gain  or  acquisition  of  the  testator  by  the  work  and  labor  or 
property  of  another,  or  a  promise  of  the  testator  express  or  implied  ;  where 
these  are  the  causes  of  action,  the  action  survives  against  the  executor. 
But  where  the  cause  of  action  is  a  tort,  or  arises  ex  delicto,  as  is  said  in 
Hole  V.  Blandford,^  supposed  to  be  by  force  and  against  the  King's  peace, 
there  the  action  dies,  —  as  battery,  false  imprisonment,  trespass,  words, 
nuisance,  obstructing  lights,  diverting  a  water-course,  escape  against  the 
sheriff,  and  many  other  cases  of  the  like  kind. 

Secondl}',  as  to  those  which  survive  or  die,  in  respect  of  the  form  of 
action.  In  some  actions  the  defendant  could  have  waged  his  law  ;  and 
therefore,  no  action  in  that  form  lies  against  an  executor.  But  now  other 
a:;tions  are  substituted  in  their  room  upon  the  very  same  cause,  which  do 
survive  and  lie  against  the  executor,  Ko  action  where  in  form  the  declar- 
ation must  be  quare  vi  et  armis,  et  contra  pacem,  or  where  the  plea  must 
be,  as  in  this  case,  that  the  testator  was  not  guilty,  can  lie  against  the 
executor.  Upon  the  face  of  the  record,  the  cause  of  action  arises  ex  delicto, 
and  all  private  criminal  injuries  or  wrongs,  as  well  as  all  public  crimes,  arc 
buried  with  the  offender. 

But  in  most,  if  not  in  all  the  cases  where  trover  lies  against  the  testator, 
another  action  might  be  brought  against  the  executor  which  would  answer 
the  purpose.  An  action  on  the  custom  of  the  realm  against  a  common 
carrier  is  for  a  tort  and  supposed  crime ;  the  plea  is  not  guilty  ;  therefore, 
it  will  not  lie  against  an  executor.  But  assumpsit,  which  is  another  action 
for  the  same  cause,  will  lie.  So  if  a  man  take  a  horse  from  another,  and 
bring  him  back  again,  an  action  of  trespass  will  not  lie  against  his  execu- 
tor, though  it  would  against  him  ;  but  an  action  for  the  use  and  hire  of  the 
horse  will  lie  against  the  executor. 

There  is  a  case  in  Sir  Thomas  Raymond,  71,*  which  sets  this  matter  in  a 
clear  light :  There,  in  an  action  upon  the  case,  the  plaintiff  declared,  "that 
he  was  possessed  of  a  cow,  which  he  delivered  to  the  testator,  Richard 
Bailey,  in  his  lifetime,  to  keep  the  same  for  the  use  of  him,  the  plaintiff ; 
which  cow  the  said  Richard  afterwards  sold,  and  did  convert  and  dispose  of 
the  money  to  his  own  use;  and  that  neither  the  said  Richard  in  his  life, 
nor  the  defendant  after  his  death,  ever  paid  the  said  money."  Upon  this 
state  of  the  case,  no  one  can  doubt  but  the  executor  was  liable  for  the 
value.  But  the  special  injury  charged  obliged  him  to  plead  that  the  testa- 
tor was  not  guilty.  The  jury  found  him  guilty.  It  was  moved  in  arrest  of 
judgment,  because  this  is  a  tort  for  which  the  executor  is  not  liable  to 

♦  Sir  T.  Raym,  57.  ^  Dailey  v.  Birtlns  d  uxor,  executrix  of  Richard  Bailey. 

3 


34  HAMBLY   V.    TROTT.  [CHAP.  L 

answer,  but  morihir  crim  persona.  For  the  plaintiff  it  was  insisted,  that 
though  an  executor  is  not  chargeable  for  a  misfeasance,  yet  for  a  non-fea- 
sance he  is ;  as  for  non-payment  of  money  levied  upon  a  fieri  facias,  and 
cited  Cro.  Car.  539  ;  9  Co.  50  b,  where  this  very  difference  was  agreed  ;  for 
non-feasance  shall  never  be  vi  et  armis,  nor  contra  pacem.  But  notwith- 
standing this  the  court  held  "  it  was  a  tort,  and  that  the  executor  ought 
,Gt  to  be  chargeable."  Sir  Thomas  Raymond  adds,  "  vide  Saville  40,  a 
difference  taken."  That  was  the  case  of  Sir  Henry  Sherrington,  who  had 
cut  down  trees  upon  the  Queen's  land,  and  converted  them  to  his  own  use 
in  his  lifetime.  Upon  an  information  against  his  widow,  after  his  decease, 
Manwood,  Justice,  said,  "  In  every  case  where  any  price  or  value  is  set  upon 
the  thing  in  which  the  offence  is  committed,  if  the  defendant  dies  his  exe- 
cutor shall  be  chargeable ;  but  where  the  action  is  for  damages  only,  in 
satisfaction  of  the  injury  done,  there  his  executor  shall  not  be  liable." 
These  are  the  words  Sir  Thomas  Raymond  refers  to. 

Here  therefore  is  a  fundamental  distinction.  If  it  is  a  sort  of  injury  by 
which  the  offender  acquires  no  gain  to  himself  at  the  expense  of  the  sufferer, 
as  beating  or  imprisoning  a  man,  etc.,  there  the  person  injured  has  only  a 
reparation  for  the  delictum  in  damages  to  be  assessed  by  a  jury.  But 
where,  besides  the  crime,  property  is  acquired  which  benefits  the  testator, 
there  an  action  for  the  value  of  the  property  shall  survive  against  the  ex- 
ecutor. As  for  instance,  the  executor  shall  not  be  chargeable  for  the  injury 
done  b}'  his  testator  in  cutting  down  another  man's  trees,  but  for  the  benefit 
arising  to  his  testator  for  the  value  or  sale  of  the  trees  he  shall. 

So  far  as  the  tort  itself  goes,  an  executor  shall  not  be  liable  ;  and  there- 
fore it  is,  that  all  public  and  all  private  crimes  die  with  the  offender,  and 
the  executor  is  not  chargeable ;  but  so  far  as  the  act  of  the  offender  is 
beneficial,  his  assets  ought  to  be  answerable ;  and  his  executor  therefore 
shall  be  charged. 

There  are  express  authorities  that  trover  and  conversion  does  not  lie 
against  the  executor;  I  mean,  where  the  conversion  is  by  the  testator. 
Sir  William  Jones,  173-4.^     There  is  no  saying  that  it  does. 

The  form  of  the  plea  is  decisive,  viz.,  that  the  testator  was  not  guilty ; 

and  the  issue  is  to  try  the  guilt  of  the  testator.     And  no  mischief  is  done : 

for  so  far  as  the  cause  of  action  does  not  arise  ex  delicto  or  ex  maleficio  of 

the  testator,  but  is  founded  in  a  duty  which  the  testator  owes  the  plaintiff, 

upon  principles  of  civil  obligation,  another  form  of  action  may  be  brought, 

as  an  action  for  money  had  and  received.     Therefore,  we  are  all  of  opinion 

that  the  judgment  must  be  arrested. 

Judgment  arrested, 

1  l^alm.  330. 


SECT.  H.]  POWELL,   HUGHES,   AND   PKOTHERO,   V.    REES.  35 


POWELL,  HUGHES,  and   PROTHERO  v.  REES,  Administratrix  op 

JOHN   REES. 

Ix  THE  Quekn's  Bench,  Michaelmas  Term,  1837. 

[Reported  in  7  Adolphus  <J'  Ellis,  426.] 

Assumpsit  for  money  had  and  received  by  the  intestate  to  the  use  of  the 
plaintifts,  and  on  an  account  stated  between  the  intestate  and  the  plaintiffs; 
with  promise  by  the  intestate.  Plea  non  assumpsit,  with  another  plea  not 
material  here. 

On  the  trial,  before  Coleridge,  J.,  at  the  last  Monmouthshire  assizes, 
the  facts  (so  for  as  material  to  the  point  here  reported)  were  as  follows. 
The  intestate  had  been  lessee  under  the  plaintifts  of  certain  coal  mines ; 
the  minerals  under  three  closes  had  been  excepted  from  the  demise,  but 
he  had  worked  them,  brought  the  coals  to  the  market,  and  received  the 
produce.  The  plaintiff's  had  sued  the  defendant  in  trespass,  after  the 
intestate's  death,  and  recovered  damages  for  the  coals  abstracted  within 
the  six  months  next  preceding  that  event,  availing  themselves  of  the 
remedy  given  by  Stat.  3  &  4  W.  4,  c.  42,  s.  2.  The  present  action  was 
brought  to  recover  damages  for  the  proceeds  of  the  sales  of  coals  by  the 
intestate  from  under  the  excepted  closes,  for  the  period  antecedent  to  the 
six  months  before  mentioned.  No  direct  evidence  of  the  amount  obtained 
by  the  intestate  for  the  coals  was  given.  It  appeared  that  they  had  been 
mixed  with  coals  taken  from  the  mines  demised,  and  all  sold  together. 
The  plaintiff's  relied  on  the  evidence  of  surveyors  as  to  the  quantity  of 
coal  which  had  been  excavated.  The  defendant's  cotmsel  objected  that  the 
action  did  not  survive  against  the  administratrix  under  these  circumstances; 
and  that,  at  any  rate,  the  action  of  trespass  which  had  been  brought  was 
inconsistent  with  the  present  action.  The  learned  judge  reserved  leave  to 
the  defendant  to  move  fur  a  nonsuit ;  and  the  plaintiff"  had  a  verdict  for 
the  sum  which  the  jury  considered  to  be  the  value  of  the  coal  taken, 
deducting  for  the  expense  of  raising  and  conveying  it  to  market. 

Talfourd,  Serjt.,  now  moved  according  to  the  leave  reserved.  The  first 
question  is,  whether,  generally,  money  had  and  received  can  be  maintained 
against  an  administrator  upon  such  a  tort  committed  by  the  intestate,  or 
whether  it  be  a  personal  action  which  expires  with  the  person.  It  is  true 
that  in  many  instances  of  tort  the  party  injured  is  permitted  to  waive  the 
tort,  and  to  proceed  for  the  money  obtained  by  the  tort-feasor,  affirming  his 
act.  This  point  is  discussed  in  Ilambly  v.  Trott.'  But  here  there  was  no 
evidence  of  the  actual  price,  which  seems  necessary  to  the  action  for  money 
had  and  received.  Harvey  v.  Archbold."  Again,  this  was,  substantially,  an 
1  1  Cowp,  371.  a  3  B.  &  C.  626. 


36  POWELL,    HUGHES,   AND   PROTHERO,   V.   REES.  [CHAP.  I. 

action  for  an  injury  to  the  freehold ;  and  it  has  never  been  held  that  such 
injuries  can  be  treated  as  contracts.  The  Statute  3  &  4  W.  4,  c.  42,  s.  2, 
seems  to  show  that  the  legislature  considered  trespass  to  be  the  only  remedy; 
otherwise  the  provision  there  would  have  been  unnecessary.  Secondly,  the 
plaintitfs,  by  proceeding  under  the  statute,  have  elected  to  treat  the  act  of 
the  intestate  as  a  trespass.  They  cannot  now  waive  the  tort ;  and,  if  not, 
they  cannot  bring  the  action  for  money  had  and  received,  which  assumes 
that  the  act  of  the  tort-feasor  is  affirmed. 

Ctir.  adv.  vult. 

Lord  Denman,  C.  J.,  in  this  term  (November  9th),  delivered  the  judg- 
ment of  the  Court. 

In  this  case,  we  disposed  of  one  ground,  on  which  a  rule  for  entering  a 
nonsuit  was  sought  to  be  obtained,  upon  the  hearing.  It  remains  to  decide 
upon  another,  which  arose  under  the  following  circumstances.  (His 
Lordship  then  stated  the  facts,  as  at  p.  35,  ante.) 

It  was  objected,  in  the  first  place,  generally,  that  no  s\;ch  action  was 
maintainable ;  that  the  foundation  of  it  was  a  tort,  the  remedy  for  which 
died  with  the  person ;  and  that  the  doctrine  of  waiving  the  tort  and  suing 
upon  a  contract  implied  by  law  could  not  be  extended  to  a  case  in  which 
no  remedy  by  action  in  tort  existed  to  be  waived.  We  were  pressed,  too, 
by  the  remark  that  such  an  action  was  of  the  first  impression,  and  by  the 
inference  to  be  drawn  from  the  language  of  the  section  above  mentioned, 
and  from  the  remedy  there  given.  If,  however,  the  legal  principles  upon 
which  the  action  is  maintainable  are  clear,  these  considerations  ought  not 
to  prevail.  In  the  present  case  the  money  which  has  been  produced  by 
the  sale  of  that  which  had  been  wrongfully  severed  from  the  plaintiffs' 
estate,  and  converted  into  chattels,  is  traced  into  the  pocket  of  the  intestate : 
it  cannot  be  doubted  that  an  action  for  money  had  and  received  would 
have  been  maintainable  against  him  for  that  money.  Plis  personal  estate 
has  come  to  the  hands  of  the  defendant,  by  so  much  increased  ;  and  we 
cannot  see  any  grounds  why  the  same  action  is  not  to  be  maintained  against 
her  who  represents  him  in  respect  of  that  estate. 

In  the  case  of  Hambly  v.  Trott,^  Lord  Mansfield  very  fully  considers 
this  subject,  and  lays  down  the  distinctions  which  arise,  as  to  the  surviving 
of  remedies,  upon  the  cause  of  action,  and  the  form  of  action.  He  observes  ^ 
that  there  "  is  a  fundamental  distinction.  If  it  is  a  sort  of  injury  by  which 
the  offender  acquires  no  gain  to  himself  at  the  expense  of  the  sufferer,  as 
beatinj^  or  imprisoning  a  man,  &c.,  there  the  person  injui*ed  has  only  a 
reparation  for  the  delictum  in  damages  to  he  assessed  by  a  jury.  But 
where,  besides  the  crime,  property  is  acquired  which  benefits  the  testator, 
there  an  action  for  the  value  of  the  property  shall  survive  against  the 
executor.  As,  for  instance,  the  executor  shall  not  be  chargeable  for  the 
mjury  done  by  his  testator  in  cutting  down  another  man's  trees,  but  for 

1  1  Cowp.  371.  2  1  Cowp.  376. 


SECT.  II.]  Ex  parte  adamson.     In  re  collie.  37 

the  benefit  arising  to  his  testator  for  the  value  or  sale  of  the  trees  he  shall." 
The  former  part  of  this  example  illustrates  the  operation  of  the  recent 
statute ;  in  the  latter,  which  is  the  present  case,  it  was  not  needed. 

But  it  was  pressed  on  us,  secondly,  that,  at  all  events,  this  action  was 
not  maintainable  after  i-ecourse  had  been  had  to  the  statute  first  referred 
to ;  for  that  the  plaintiffs,  having  elected  to  proceed  for  damages  for  the 
trespass  in  part,  could  not  split  it  and  sue  in  contract  for  the  other  part 
The  conduct  of  the  plaintiffs  may  have  been  vexatious;  but  that  furnishes 
no  legal  answer  to  this  action,  because,  in  truth,  the  intestate  was  guilty 
of  a  series  of  trespasses,  and  not  of  one  single  wrongful  act.  The  plaintiffs, 
therefore,  have  only  pursued  different  remedies  for  different  injuries :  they 
might  indeed  have  recovered  a  compensation  for  all  under  the  present  form 
of  proceeding,  but  they  were  not  bound  to  do  so. 

Upon  the  whole  there  must  be  no  rule.  Ruk  refused. 


Ex  parte   ADAMSON.     In  re  COLLIE. 
In  the  Court  op  Appeal,  July  4,  1878. 

[Reported  in  Lav)  Reports  8  Cliancery  Division,  807.] 

This  was  an  appeal  from  a  decision  of  Mr.  Registrar  Murray,  acting  as 
Chief  Judge  in  Bankruptcy,  rejecting  a  proof  for  £120,197  10s.  lit/.,  ten- 
dered by  John  Adamson  against  each  of  the  separate  estates  of  Alexander 
and  William  Collie,  partners,  who  were  adjudicated  bankrupts  on  the  1 9th 
of  August,  1875. 

A.  and  W.  Collie  were  merchants  trading  in  London  and  at  Manchester, 
iinder  the  firm  of  Alexander  Collie  &  Co.  In  the  year  1872  Adamson  ar- 
ranged with  the  firm  to  enter  with  them  into  speculations  in  the  purchase 
and  sale  of  cotton  on  joint  account,  for  which  purpose  he  was  to  supply  the 
requisite  capital  by  accepting  bills  of  exchange  drawn  upon  him  by  them. 
Adamson  was  to  receive  half  the  net  proceeds  of  the  ventures.  This  arrange- 
ment was  carried  out,  and  he  from  time  to  time  accepted  bills  to  a  large 
amount,  which  were  discounted  by  the  firm.  The  bills  were  renewed  from 
time  to  time.  The  firm  from  time  to  time  wrote  to  Adamson,  sending  iiiiu 
accounts  of  purchases  and  sales  of  cotton  on  the  joint  account.  On  the  ir)th 
of  June,  1875,  the  firm  stopped  payment,  and  immediately  after  this  Adam- 
son discovered  that  the  alleged  purchases  of  cotton  on  the  joint  account 
were  almost  entirely,  if  not  entirely,  fictitious,  and  that  no  cotton,  or  at  any 
rate  a  very  small  quantity,  had  ever  been  purchased  on  that  account,  and 
Alexander  Collie  confessed  that  ho  had  deceived  him.  After  the  stoppage 
of  the  firm  Adantsou  was  compelled  to  pay  his  acceptances  when  they 


38  Ex  parte  adamson.     In  re  collie.  [chap.  i. 

matured,  and  his  proof  of  .£120,197  10s.  \\d.  was  for  the  moneys  which 
he  had  thus  paid.^ 

July  4.  James,  L.  J.,  delivered  the  judgment  of  himself  and  Baggallay, 
L.  J.,  as  follows  :  — 

There  are  two  questions  to  be  decided  in  this  case.  The  first  is,  whether 
Mr.  Adamson,  the  appellant,  is  to  be  allowed,  after  proving  against  the 
joint  estate  and  receiving  a  dividend  on  that  proof,  to  prove  against  the 
separate  estates,  withdrawing  his  joint  proof  and  returning  what  he  has 
received.^ 

The  second  question,  therefore,  remains  to  be  considered,  Has  he  that 
right  1  The  counsel  for  the  respondent  having  contended  that  Mr.  Adam- 
son must  be  taken  to  have  knowingly  elected  between  two  alternative  rights 
which  he  must  be  taken  to  have  known,  next  argued  that  he  had  no  right 
of  proof  against  the  separate  estates  of  the  partners.  The  ground  for  the 
separate  proof  is  this  :  Mr.  Adamson  was  induced  to  accept  bills  of  exchange 
for  a  very  large  amount,  on  the  representation  that  they  were  bills  or  re- 
newals of  bills  representing  the  purchase-money  of  large  quantities  of  cot- 
ton, stated  to  have  been  purchased  on  the  joint  account  of  Mr.  Adamson 
and  the  two  Collies,  and  continued  to  be  held  by  them  on  such  joint  account. 
This  representation  was  wholly,  or  almost  wholly,  fictitious,  and  there  is  no 
doubt  that  Mr.  Adamson  was  cheated  out  of  the  acceptances  which  he 
gave,  and  which  he  had  to  meet  when  they  matured.  That  Alexander 
Collie  was  guilty  of  the  frauds  there  is  no  dispute,  and,  in  the  absence  of 
evidence  to  explain  his  part  of  the  transaction,  it  is  impossible  not  to  hold 
that  William  Collie,  who  himself  signed  letters  and  accounts  constituting 
the  ftilse  representations  of  the  fictitious  cotton  dealings,  must  be  held  to 
have  been  aware  that  he  was  lending  himself  to  his  brother's  frauds. 
There  was,  therefore,  a  fraud  practised  on  Mr.  Adamson  in  which  both  the 
Collies  were  participators.  And  it  has  always  been  held  in  the  Court  of 
Chancery  that  for  a  fraud,  as  for  a  breach  of  trust,  each  participator  is  lia- 
ble ill  soUdo,  Some  doubt  was,  however,  suggested  in  the  course  of  the 
argument  whether  proof  could  be  made  in  bankruptcy  for  a  fraud  any  more 
than  for  other  torts.  A  great  many  cases  —  if  cases  were  necessary  — 
show  that  proofs  have  been  allowed  in  bankruptcy  for  fraud,  and  on  the 
ground  of  fraud  only,  where  on  a  mere  breach  of  contract  they  would  not 
have  been  admitted.  A  notable  instance  of  this  is  in  the  proof  allowed  in 
Read  v.  Bailey,^  by  the  joint  estate  against  the  separate  estate  for  mon- 
eys fraudulently  abstracted  from  the  partnership  assets,  a  decision  which 
only  followed  a  whole  line  of  recognized  authorities.  But,  in  truth,  the 
proof  is  not  for  the  fraud  or  for  the  tort.     The  Court  of  Chancery  never 

1  So  m\ich  of  the  statement  of  facts  as  relates  to  the  plaintiff's  having  elected  to 
prove  against  the  joint  estate  has  been  omitted.  —  Ed. 

2  So  much  of  the  opinion  as  relates  to  the  question  of  election  has  been  omitted.  —  Ed. 

3  3  App.  Cas.  94. 


SECT.  II.]  Ex  parte  adamson.     In  re  COLLIE.  30 

entertained  a  suit  for  damages  occasioned  by  fraudulent  conduct  or  for 
breach  of  trust.  The  suit  was  always  for  an  equitable  debt  or  liability 
iu  the  nature  of  debt.  It  was  a  suit  for  the  restitution  of  the  actual 
money  or  thing,  or  value  of  the  thing,  of  which  the  cheated  party  had  been 
cheated.  If  a  man  had  been  defrauded  of  any  money  or  property  and  the 
cheater  afterwards  became  bankrupt,  if  the  money  could  be  earmarked,  or  if 
the  thing  covJd  be  found  in  specie,  or  traced,  the  assignees  or  trustees  wer^ 
made  to  give  it  back,  or  if  it  could  not  be  earmarked  or  traced,  then  proof 
was  allowed  against  the  estate.  It  was  a  very  common  thing  to  have  a 
suit  against  solvent  persons  and  the  assignees  of  a  bankrupt,  to  set  asic-'- 
tmnsactions  as  fraudulent,  and  to  have  a  decree  against  the  solvent  persons, 
and  a  declaration  of  a  right  of  proof  against  the  estate  of  the  bankrupt. 
This  was  done  as  a  matter  of  course  in  the  case  of  Phosphate  Sewage  Com- 
pany V.  Hartmout.^  In  cases  of  fraud,  or  breach  of  trust,  which  is  often 
only  one  form  and  instance  of  fraud,  there  never  was  any  division  of  liability 
between  the  tort-feasors ;  every  person  participating  in  the  tort  was  liable 
to  make  good  the  whole ;  the  liability  of  each  in  equity  was  for  the  whole 
amount.  And  the  proof  in  bankruptcy  was  exactly  commensurate  with 
that  liability  ;  it  being  the  established  rule  in  bankruptcy  that  every  debt 
which  a  person  could,  either  in  his  own  name  or  in  the  name  of  any  other 
person,  recover  at  law  or  in  equity,  was  a  provable  debt  in  bankruptcy.  It 
is  said  in  the  books  that  debts  due  by  reason  of  fraud  or  breach  of  trust  are 
joint  and  several.  There  is  here  a  slight  inaccin-acy.  Of  course  tort-feasors 
may  be  sued  all  in  one  action,  or  in  several  actions,  but  there  is  not  really 
or  practically  any  joint  liability  as  distinct  from  the  several  liability,  except 
where  there  is  a  partnership  and  a  joint  estate.  It  is  a  mere  accident,  but 
a  frequent  accident,  that  the  fraud  is  connected  with  a  partnership,  but 
where  it  is,  the  result  often  is  that  the  partnership  in  its  joint  character  is 
liable  for  it.  If  the  profits  or  proceeds  of  the  fraud  found  their  w'ay  into 
the  partnership,  then  on  that  ground  the  partnership  became  indebted  for 
them,  or  if  the  fraud  was  in  the  course  of  the  partnership  business,  and  was 
practised  by  one  of  the  partners  on  a  client  or  customer  of  the  firm,  then 
the  firm  —  however  innocent  the  other  partners  may  have  been,  and  al- 
though the  guilty  partner  alone  stole  the  plunder — was  held  liable  to  make 
full  restitution  to  the  defrauded  client  or  customer.  But  this  right  to  go 
against  the  partnership  assets  did  not  relieve  the  guilty  party  or  parties  of 
his  or  their  personal  and  separate  liability  by  reason  of  his  or  their  actual 
participation.  If  in  a  partnership  of  A.,  B.,  C,  and  D.,  and  in  a  partnership 
matter,  A.  and  B.  shared  in  a  fraud  upon  a  customer,  they  would  be  sever- 
ally liable,  and  the  joint  estate  would  be  liable  to  make  restitution  ;  but 
not  the  separate  estates  of  C.  and  D.  And  the  rule  about  joint  and  sev- 
eral liability  must  be  read  with  this  qualification  ;  but,  so  qualified,  the  rule 
is  a  well-established  rule.     And,  according  to  this  rule,  Mr.  Adamson  was 

»  5  Ch.  D.  394. 


40  Ex  parte  ADAMSON.     In  re  COLLIE.  [chap,  l 

uot  entitled  to  go  against  the  joint  estate  and  the  separate  estates,  but 
had  to  make  his  election.  It  is  not  too  late  for  him  now  to  elect,  and  it 
must  therefore  be  declared  that  he  is  entitled  to  prove  against  the  separate 
estates  of  Alexander  and  William  Collie  in  respect  of  the  bills  which  he 
was  induced  to  accept  by  their  fraud ;  but  he  must  withdraw  his  proof 
from  the  joint  estate  and  refund  the  dividend  accordingly,  and  it  must  be 
refeired  back  to  the  Registrar  to  ascertain  the  amount  on  the  footing  of 
this  declaration.  Under  the  circumstances,  the  proper  order  as  to  costs 
will  be  to  allow  him  to  add  his  costs  in  the  Court  below  and  here  to  the 
amount  of  his  proofs  against  the  separate  estates. 

Eramwell,  L.  J.  :  — 

In  this  case  the  facts  and  the  conclusions  I  draw  from  them,  so  far  as 
they  need  be  stated,  are  as  follow  :  The  appellant  Adamson  and  the  bank- 
rupts agreed  to  have  a  joint  specuhxtion  in,  among  other  things,  cotton. 
The  bankrupts  were  to  buy  and  sell  cotton  on  joint  account.  The  cotton 
was  to  be  paid  for  by  the  bankrupts,  who  were  to  draw  on  tlie  appellant 
for  the  amount  of  the  price.  They  could  then  procure  the  bills  to  be  dis- 
counted, and,  with  the  proceeds,  pay  the  price  of  the  cotton ;  or,  of  course, 
if  their  means  had  enabled  them,  they  might  have  kept  the  bills  and  paid 
for  the  cotton  out  of  their  general  funds.  If,  when  the  bills  became  due, 
the  cotton  was  not  sold,  then  the  bankrupts  were  to  draw  fresh  bills  on  the 
appellant,  and,  as  before,  or  out  of  their  general  funds,  provide  for  the 
furmer  bills.  The  bankrupts  represented  to  the  appellant  that  they  had 
bought  quantities  of  cotton,  and  drew  bills  on  him  fcr  the  amount  of  the 
price.  These  bills  he  accepted.  They  were  renewed  from  time  to  time, 
and  ultimately  the  last  renewals  were  paid  by  the  appellant.  It  turned 
out  that  the  statement  that  cotton  had  been  bought  was  false  and  fraudu- 
lent, that  scarcely  any  had  been.  Consequently,  there  was  no  cotton  out 
of  the  proceeds  of  which  the  appellant  could  be  reimbursed,  and,  the  bauk- 
rr.pts  having  stopped  payment  before  the  last  renewed  bills  became  due,  the 
appellant  is  now  the  amount  of  them  out  of  pocket.  Further,  the  fraud, 
on  the  evidence  before  us,  must  be  taken  to  be  a  fraud  by  each  of  the  biiik- 
rupts  as  much  as  by  either.  Under  these  circumstances  the  appellain, 
had  a  claim  on  the  bankrupts  which  he  might  have  presented  in  any  one  of 
three  shapes.  He  might  have  omitted  all  mention  of  fraud,  and,  relying 
on  the  contract  of  the  bankrupts,  might  have  complained  that  they  had 
not  bought  cotton  on  joint  account,  and  have  sued  them  for  unliquidated 
damages  ;  or  he  might  have  put  his  claim  as  for  a  liquidated  sum  by  show- 
ing the  fiicts,  with  no  statement  of  fraud,  and  saying  that  the  law  raised  m 
duty  in  the  bankrupts  to  pay  the  bills,  the  same  as  in  the  case  of  an  accom- 
modation bill,  and  that,  therefore,  his  payment  under  the  compulsion  of 
being  the  acceptor  was  a  payment  by  him  for  them.  Had  he  put  his  case 
in  either  of  these  ways,  he  would  have  put  it  in  a  way  which  entitled  him 
to  prove  against  their  joint  estate,  either  for  a  specific  ascertained  debt  ci 


SECT.  II.]  Ex  parte  adamson.     In  re  COLLIE.  41 

for  unliquidated  damages,  aud  not  agaiust  either  separate  estate.  Or  he 
might  have  maintained  a  claim  against  them  for  a  tort,  for  the  fraud  they 
had  conunitted,  in  which  case  one  may  observe  that,  accorJiug  to  Barwick 
V.  English  Joint  Stock  Bank,'  one  partner  would  be  liable  for  the  fraud 
of  the  other,  even  if  personally  innocent  of  it.  This  claim  he  might  have 
maintained  against  both  jointly  or  either  separately  from  the  other  for  un- 
liquidated damages,  and,  except  that  he  is  precluded  by  his  proof,  might 
do  so  now ;  for  if  he  had  shaped  his  case  in  this  way,  he  would  have  shaped 
it  in  a  way  which  showed  that  he  had  not  a  provable  claim,  and  so  the 
bankruptcy  of  those  liable  would  be  no  impediment  to  his  maintaining  an 
action  against  them.  These  are  the  ways  in  which  he  might  have  shaped 
his  claim  at  common  law  before  the  Judicature  Act,  and  so  he  may  now. 
But,  beside  these  three  ways  of  shaping  and  enforcing  his  claim,  it  appears 
there  is  another.  It  seems  that  a  court  of  equity,  before  the  Judicature 
Act,  where  a  definite  specific  sum  of  money  was  obtained  by  fraud  by  two 
or  more  persons,  would  decree  a  restitution  of  the  sum  so  obtained,  and 
make  the  decree  against  the  defendants  joint  and  several.  Why,  I  know 
not.  If  there  was  no  fraud  the  plaintiff  would  be  sent  to  law.  So  he  would 
if  the  damages  were  unliquidated.  But  where  there  was  the  combination 
of  two  things  neither  of  which  was  enough,  the  court  of  equity  would 
grant  relief.  So,  of  course,  must  the  High  Court  now.  So  that  the  appel- 
lant may  now  maintain  an  action  for  the  fraud,  and  recover,  as  I  have 
pointed  out,  in  accordance  with  the  former  common-law  practice,  unliqui- 
dated damages  against  the  defendants  jointly,  or,  according  to  the  former 
equity  practice,  a  liquidated  sum  against  them  jointly  and  severally.  But 
how  does  this  entitle  him  to  prove  for  the  liquidated  sum  due  and  recover- 
able for  a  fraud,  any  more  than  he  could  for  the  unliquidated  sum  due 
and  recoverable  for  a  fraud  ]  It  is  to  be  remembered  that  he  has  not  got 
a  judgment.  If  he  had,  the  amount  would  be  provable,  whether  recovered 
for  a  fraud,  a  slander,  or  any  other  tort.  What  is  the  difference  between 
the  two  claims  both  founded  on  fraud?  One  is  a  claim  for  a  liquidated, 
the  other  for  an  unliquidated  sum.  But  that  is  an  immaterial  difference, 
as  claims  for  unliquidated  amounts  are  provable  now.  What  other  differ- 
ence is  there  1  The  former  equity  decree  for  the  liquidated  sum  would  bo 
against  the  defendants  jointly  and  severally.  The  judgment  at  common 
law  would  be  against  them  jointly  only.  But  this  makes  no  difference ; 
the  foundation  of  the  claim  is  the  same,  and,  as  I  have  said,  no  judgment 
has  been  got.  And  though  the  common-law  judgment  is  not  against  the 
defendants  jointly  and  severally,  its  effect  is  nearly  the  same.  If  the  claim 
for  the  unliquidated  amount  is  not  provable,  why  is  that  for  the  licjuidated] 
The  reason  why  the  one  is  not  provable  is  equally  applicable  to  the  other. 
And  that  reason  is  this,  that  the  law  does  not  allow  it.  Claims  founded  on 
tort  are  not  provable ;  nothing  is  provable  but  those  claims  which  arise  out 

1  L.  R.  2  E.X.  259. 


42  Ex  jparte  adamson.     In  re  collie.  [chap.  i. 

of  contract.  The  Bankruptcy  Act,  sect.  1,  says,  "Debt  provable  in  bank- 
ruptcy shall  include  any  debt  or  liability  by  this  Act  made  provable  in  bank- 
ruptcy." Sect.  31  says,  "Demands  in  the  nature  of  unliquidated  damages 
arising  otherwise  than  by  reason  of  a  contract  or  promise  shall  not  be  prov- 
able in  bankruptcy."  If  that  was  all,  it  might  be  said  that  this  is  not  a 
demand  in  the  nature  of  unliquidated  damages,  and  therefore  not  prohib- 
ited. True,  it  may  not  be  thereby  prohibited,  but  the  next  clause  is  "  save 
as  aforesaid  all  debts  and  liabilities,"  etc.,  shall  be  deemed  to  be  debts  prov- 
able, and  "  liability  "  is  afterwards  said  to  include  a  variety  of  matters  all  of 
which  suppose  an  express  or  implied  contract.  There  are,  no  doubt,  pi-ov- 
able  debts  where  there  is  no  contract,  as  a  debt  on  a  judgment.  But  in 
such  cases  the  law  implies  a  duty  to  pay  it.  But,  certainly,  till  the  present 
case,  it  was  never  supposed  that  a  claim  for  a  wrong  was  provable,  or  that 
the  discharge  of  the  bankrupt  released  him  from  such  a  claim.  Would  the 
discharge  of  these  bankrupts  discharge  them  from  an  action  against  them 
in  the  form  of  the  old  suit  in  equity  for  a  joint  and  several  decree  for  pay- 
ment of  money  ?  The  proof  against  the  separate  estate  in  Read  v.  Bailey,^ 
was  the  proof  of  a  debt.  The  proof  in  Phosphate  Sewage  Company  v. 
Hartmont  2  was  ordered  without  the  question  being  mooted  as  to  whether 
the  ground  of  fraud  in  the  case  prevented  the  proof  The  proof  against  the 
separate  estate  of  the  infant  obligor  of  a  joint  and  several  bond  was  allowed, 
because  it  was  a  joint  and  several  bond,  and  he  was  held  to  be  bound  by  it. 
Breaches  of  trust  are  provable  against  joint  or  separate  estate,  because,  I 
suppose,  trustees  are  held  to  undertake  jointly  and  severally  for  the  per- 
formance of  their  duties,  not  because  there  is  fraud  in  breach  of  trust. 
There  may  be  a  breach  of  trust  where  in  all  good  sense  there  is  no  pretence 
for  saying  there  is  fraud.  To  my  mind,  then,  the  present  claim  is  contrary 
to  principle,  contrary  to  the  statute,  and  without  precedent.  Mr.  Justice 
Lindley's  opinion  is  clearly  against  it.  On  the  other  point,  whether  the 
appellant  is  too  late  to  change  his  proof,  I  am  in  his  favor,  I  will  only 
add  that  I  cannot  see  that  the  separate  estate  has  any  ground  for  com- 
plaint, except  that  the  proof  comes  late,  which  is  no  objection ;  and  that 
the  joint  estate  cannot  complain  that  it  is  relieved  of  a  proof.  But,  on  the 
other  ground,  I  am  of  opinion  that  the  appeal  should  be  dismissed. 

The  Court  gave  the  trustee  leave  to  appeal  to  the  House  of  Lords,  on 
condition  of  his  presenting  the  appeal  within  a  month. 

1  3  App.  Cas.  94.  2  5  ch.  D.  394. 


SECT.  II.J  PHILLIPS   V.   HOMFRAY.  43 

PHILLIPS  V.   IIOMFRAY. 
In  the  Court  of  Appeal,  July  9,  1883. 

[Reported  in  Law  Reports  24  Chancery  Division,  439.] 

This  suit  was  instituted  in  the  year  1866  by  the  plaintiffs  against  S. 
Homfray  and  other  persons,  including  the  deceased  R.  Fothergill,  praying 
for  a  declaration  that  the  defendants  were  liable  in  respect  of  certain  coal 
and  ironstone  gotten  and  removed  by  them  from  under  the  plaintiifs'  farm, 
for  an  account  of  the  coal  and  ironstone  gotten  by  them  from  under  the 
farm,  for  an  account  of  coal  and  ironstone  conveyed  from  the  defendant's  own 
mines  through  roads  and  passages  under  the  plaintiflTs  farm,  and  that  the 
defendants  might  be  decreed  to  pay  for  the  coal  and  ironstone  wrongly 
gotten  by  them  from  under  the  plaintiffs'  farm  at  their  proper  value,  and 
also  to  pay  a  wayleave  rent  or  compensation  in  respect  of  their  user  of  the 
roads  and  passages  under  the  plaintiffs'  farm  for  the  conveyance  of  their 
own  coal  and  ironstone;  also  that  they  might  pay  compensation  for  the 
damage  done  to  the  surface  of  the  plaintiff's'  farm,  and  for  other  relief. 
The  facts  of  the  case  are  substantially  set  forth  in  Law  Uep.  6  Ch.  770. 
On  the  28th  of  August,  1869,  W.  H.  Forman,  one  of  the  defendants,  died, 
and  the  suit  was  revived  against  his  executors.  The  cause  came  on  for 
hearing  before  Vice-Chancellor  Stuart,  together  with  the  cross-suit  of 
Fothergill  v.  Collins,  in  which  the  defendants  in  the  first-named  suit  prayed 
against  the  plaintiffs  in  the  first-named  suit  specific  performance  of  an 
agreement  for  sale  of  the  plaintiffs'  farm.  On  the  9th  of  May,  1870,  a 
decree  was  made  in  both  suits  by  the  Vice-Chancellor,  which  was  appealed 
from.  The  appeal  came  on  for  hearing  before  Lord  Hatiierley,  L.  C,  who 
on  the  30th  of  June,  1871,  made  an  order  varying  the  decree  of  the  Vice- 
Chancellor. 

By  the  Vice-Chancellor's  decree,  as  varied  on  appeal,  it  was,  amongst 
other  things,  declared  that  the  defendants  Fothergill  and  S.  Homfray  in 
the  first  suit,  and  the  estate  of  the  deceased  defendant  \V.  H.  Forman  in 
the  first  suit,  were  answerable  to  the  plaintiffs  in  the  first  suit  for  and 
in  respect  of  all  coal,  ironstone,  and  other  produce  at  any  time  gotten  or 
removed  by  them,  or  by  their  order,  or  for  their  use,  under  the  plaintiffs' 
farm,  or  any  part  thereof,  and  that  the  defendants  S.  Homfray  and  li. 
Fothergill  were  liable  to  make  compensation  to  the  plaintiffs  in  the  first 
suit  for  user  of  all  roads  and  passages  under  the  said  farm  ;  and  the  follow- 
ing inquiries  were  directed:  1.  An  inquiry  what  quantities  of  coal,  iron- 
stone, and  other  produce  have  been  so  gotten  or  removed  as  aforesaid. 
And  it  was  ordered  that  the  market  price  or  value,  or  as  near  thereto  as 
may  be,  of  all  coal,  ironstone,  and  other  produce  so  gotten  or  removed  as 


44:  PHILLIPS   V.   HOMFRAY.  [CHAP.  I. 

aforesaid  at  the  pit's  mouth  (all  just  allowances  being  made  to  the  defeud- 
auts  in  the  first  suit  in  respect  of  their  charges  and  expenses,  if'  any,  on 
account  of  the  carriage  to  the  pit's  mouth  or  otherwise  of  such  coal,  iron- 
stone, and  other  produce,  but  no  allowance  being  made  for  the  expense  of 
getting,  severing,  or  working  the  same)  be  certified.  And  it  was  ordered 
that  the  following  further  inquiries  be  made  :  2.  An  inquiry  what  quan- 
tities of  coal,  ironstone,  and  other  produce  have  been  conveyed  from  the 
collieries  and  mines  of  the  defendants  in  the  first  suit  in  the  pleadings 
mentioned,  or  any  of  them,  over  or  through  the  roads  or  passages  under 
the  plaintiffs'  said  farm.  3.  An  inquiry  what  amoimt,  upon  the  result 
of  the  inquiry  last  directed,  ought  to  be  paid  by  the  defendants  in  the  first 
suit  to  the  plaintiffs  in  the  first  suit  for  wayleave  and  royalty  in  respect  of 
the  user  by  the  defendants  in  the  first  suit  of  the  said  roads  and  passages 
for  the  purpose  of  working  their  said  collieries  and  mines.  4.  An  inquiry 
whether  the  said  farm  and  the  mineral  property  of  the  plaintifls  in  the  first 
suit  under  the  same  have  sustained  any,  and  if  any,  what  amount  of  dam- 
age by  reason  of  the  manner  in  which  the  defendants  in  the  first  suit  have 
worked  the  coal,  ironstone,  and  other  produce  under  the  plaintiffs'  said 
farm. 

R.  Fothergill  died  on  the  19th  of  September,  1881,  and  the  suit  of 
Philipps  V.  Horafray  was  revived  against  the  defendant  Mary  Fothergill, 
as  executrix  of  his  will.  In  consequence  of  litigation  with  the  lady  of  the 
manor  in  which  the  plaintiffs'  farm  is  situate  (see  Llanover  v.  Homfray  ^) 
the  above  inquiries  in  Phillips  v.  Homfray  were  not  proceeded  with  until 
July,  1882,  when  an  order  was  made  by  Mr.  Justice  Kay  in  chambers 
directing  that  the  inquiry  should  be  made  by  the  official  refei'ee,  who,  after 
hearing  the  parties  for  some  days,  adjourned  the  case  until  the  first  of 
July,  1883. 

In  February,  1883,  a  motion  was  made  by  Mrs.  Fothergill  before  Mr. 
Justice  Pearson  that  all  proceedings  under  the  second,  third,  and  fourth 
inquiries  might  be  stayed,  and  the  official  referee  directed  not  to  proceed 
with  them.  The  motion  was  argued  on  the  15th,  17th,  and  20th  of 
February,  1883. 

February  24,  Mr.  Justice  Pearson  made  an  order  staying  the  fourth  in- 
quiry, but  refused  to  stay  the  second  and  third  inquiries. 

jVIrs.  Fothergill  appealed  against  this  order  as  regarded  inquiries  two 
and  three,  and  the  plaintiffs  gave  cross-notice  of  appeal  against  it  as  re- 
garded inquiry  four.  The  appeals  were  argued  on  the  22d  and  30th  of 
May,  1883. 

J^ig^^i/i  Q-  C.,  and  Osier,  for  Fothergill's  executrix  :  — 

The  trespasses  which  form  the  subject  of  inquiries  two,  three,  and  four 
are  personal  trespasses  in  tort,  and  give  no  right  of  action  against  the  ex- 
ecutors of  the  trespasser.     The  Court  of  Chancery  could  not  give  damages 

1  19  Ch.  D.  224. 


SECT.  II.]  PHILLIPS   V.   HOMFRAY.  45 

in  respect  of  wnyleave.  Powell  v.  Aiken. ^  It  makes  no  difference  that  the 
trespasser  made  a  profit  by  the  trespass,  l^nless  some  part  of  the  plain- 
tiff's property  can  be  traced  into  tlie  trespasser's  estate,  or  unless  the  dam- 
ages were  assessed  before  the  trespasser's  death,  his  estate  cannot  be  made 
liable  after  his  death.     Peek  v.  Gurney.' 

[BowEN,  L.  J.  :  —  In  many  cases  you  may  waive  the  tort  and  claim 
damages  on  the  implied  contract.] 

For  the  use  of  real  estate  you  cannot  get  damages  for  use  and  occupa- 
tion if  you  treat  the  defendant  as  a  trespasser.  Birch  v.  Wright.^  If  there 
is  nothing  before  the  jury  except  that  the  plaintiff  is  owner  and  the  de- 
fendant is  in  possession,  they  may  presume  that  the  defendant  was  in  pos- 
session with  the  leave  of  the  plaintiff,  and  may  give  damages  for  use  and 
occupation.  But  if  there  is  evidence  that  the  defendant  is  a  trespasser,  a 
claim  for  use  and  occupation  will  not  lie.  You  must  be  able  to  imply  a 
contract.  Churchward  v.  Ford ;  *  Tew  v.  Joncs.^  You  cannot  get  mesne 
profits  against  the  executor  of  a  person  who  has  been  in  unlawful  posses- 
sion, because  it  is  a  trespass.  Mayne  on  Damages;"  Adams  on  Ejectment  j' 
Pulteney  v.  Warren.* 

In  the  present  case  Fothergill  was  treated  as  a  trespasser  from  first  to 
last,  and  the  plaintiffs  could  not  have  recovered  damages  for  use  and  occu- 
pation. Turner  v.  Cameron's  Coalbrook  Steam  Coal  Company;^  Kirk  v. 
Todd.^**  The  latter  case  goes  too  far  in  saying  that  the  testator  got  no 
benefit,  for  he  did  get  a  benefit. 

[Baggallay,  L.  J.  :  —  Lord  Mansfield  says  in  Hambly  v.  Trott "  that  if 
a  man  takes  the  horse  of  another  an  action  for  the  use  and  hire  of  the 
horse  will  lie  against  his  executor  on  an  implied  assumpsit.] 

If  Lord  Mansfield  is  right  in  saying  that  you  can  bring  an  action  against 
executors  in  such  a  case,  that  does  not  apply  to  real  estate.  Bishop  of 
Winchester  v.  Knight." 

[Baggallay,  L.  J.  :  —  A  decree  was  actually  made  against  Fothergill  in 
his  lifetime.] 

Yes ;  but  the  damages  had  not  been  assessed.  Therefore  the  proceed- 
ings against  him  were  not  complete.    Wheatley  v.  Lane;"  Smith  v.  Eylcs." 

Hastings,  Q.  C,  and  Maclean,  for  the  plaintiffs  :  — 

Whenever  a  wrongful  act  has  been  productive  of  benefit  to  the  testator's 
estate,  the  injured  person  may  follow  the  profit  and  recover  against  the 
estate.  Hambly  v.  Trott.  We  claim  to  recover  from  the  testator's  estate 
the  profit  which  he  got  by  his  wrongful  act.  The  real  question  is  whether 
the  testator's  estate  has  been  increased.     Monypenny  v.  Bristow.^^ 

»  4  K.  &  J.  343.  2  i^.  R,  (5  ji   L.  377,  »  1  T.  K.  378. 

*  2  H.  &  N.  446.  6  13  M.  &  W.  12.  «  3r.l  K.l.  p.  391. 

'  4th  M.  p.  33G.  8  6  Ves.  73.  »  5  Kx.  !)32. 

10  21  f'h.  D.  484.  "  1  Cowp.  371.  12  1  p.  -\Vms.  406. 

"  1  Wnis.  Saiind.  216a.  "  2  Atk.  385.  i*  2  Uu.ss.  &  .M.  117. 


46  PHILLIPS   V.    HOMFKAY.  [CHAP.  I. 

[BowEN',  L.  J. :  —  The  damages  against  Fothergill  in  his  lifetime  were 
twofold  :  first,  in  respect  of  the  damage  done  to  the  plaintiffs ;  and  sec- 
ondly, in  respect  of  the  profit  which  Fothergill  had  made  and  which  he 
ought  to  have  paid  over  to  the  plaintiffs.  When  he  died  why  do  not  the 
latter  survive  though  the  first  do  not  1] 

[Cotton,  L.  J.  : —  One  difficulty  is,  that  the  plaintiffs  did  not  waive  the 
tort,  but  insisted  on  it,  and  elected  to  bring  their  action  in  that  form. 
Then,  how  can  they  now  go  on  against  the  executrix  ?  ] 

The  appellant  refers  to  Pulteney  u.  Warren,^  bnt  that  case  destroys  the 
defendant's  position  in  equity.  There  was  here  a  fraudulent  concealment 
• — had  there  not  the  plaintifts  might  have  got  a  decree  ten  years  sooner. 
The  plaintiffs  could  not  with  reasonable  diligence  have  discovered  the  fraud 
earlier,  so  the  Statute  of  Limitations  is  no  defence.  Ecclesiastical  Commis- 
sioners V.  North  Eastern  Ftailway  Company.^ 

[Cotton  L.  J. :  —  Is  there  any  case  where  it  has  been  held  that  fraud- 
ulent concealment  prevents  the  application  of  the  rule  actio  j^ersonalis 
inoritnr  cum  persona  .?] 

The  precise  point  does  not  appear  ever  to  have  been  raised.  Even  if  the 
executors  could  not  be  sued  at  law  there  are  here  equitable  circumstances 
which  entitle  the  plaintiffs  to  sue  for  mesne  rents  and  profits,  according  to 
the  principles  laid  down  by  Lord  Eldon  in  Pulteney  v.  Warren.^  Now  as 
to  the  cases  referred  to  by  the  appellant.  In  Powell  v.  Aiken*  the  person 
against  whom  the  relief  was  sought  was  not  the  person  who  had  made  the 
passages,  and  if  the  context  is  taken  into  account  it  is  clear  that  the  expres- 
sions of  the  Vice-Chancellor,  on  which  the  appellant  relics,  refer  to  conse- 
quential damages,  not  to  profit  derived  by  the  wrongdoer  from  the  trespass. 
In  Bishop  of  Winchester  v.  Knight  ^  it  is  only  said  that  a  trespass  of  break- 
ing up  meadow  or  ancient  pasture  ground  dies  with  the  person.  That  is  a 
mere  case  of  damage  from  which  the  trespasser  does  not  derive  profits. 
The  case  of  mines,  as  observed  by  Lord  Eldon  in  Pulteney  v.  Warren, ° 
stands  on  quite  a  different  footing.  Then  the  appellant  contends  that  the 
frame  of  the  decree  precludes  the  plaintiffs  from  raising  this  question,  for 
that  it  is  framed  in  tort,  and  Smith  v.  Eyles '  is  relied  upon  as  supporting 
the  proposition  that  though  a  decree  is  prefaced  by  a  declaration  that  a 
party  is  bound  to  make  compensation,  still  the  decree  cannot  be  prosecuted 
after  the  death  of  the  party  ;  but  the  case  really  decided  nothing  as  to 
whether  the  decree  could  be  prosecuted,  it  only  decided  that  a  decree  to 
account  did  not  prevent  the  executor  from  suffering  a  judgment  which 
would  have  priority  over  the  plaintiff's  claim.  It  assumes,  in  fact,  that 
the  decree  could  be  prosecuted.  The  decree  in  the  present  case  really  is 
not  framed  in  tort,  it  gives  compensation  for  use  and  occupation,  and  is 

1  6  Ves.  73.  2  4  ch.  D.  845.  3  6  Ves.  73,  88,  93. 

*  4  K.  &  J.  343,  6  1  P.  Wms.  406.  «  6  Ves.  73. 

7  2  Atk.  385. 


SECT.  II  ]  PHILLIPS   V.   HOMFKAY.  47 

substantially  a  decree  for  payment  of  the  profits  derived  from  the  use  of  a 
wayleave.  There  is  no  analogy  between  a  common-law  inquiry  as  to  dam- 
ages and  a  case  like  this.  In  Monypeuny  v.  Bristow  ^  a  suit  was  held 
maintainable  against  an  executor  for  rents  wrongfully  received  by  his  tes- 
tator, on  the  express  ground  that  where  an  injury  is  accompanied  by  a 
profit  to  the  trespasser  the  party  injured  may  waive  the  tort  and  bring  an 
action  for  the  profit.  The  decree  was  made  in  Fothergill's  lifetime  and 
fixes  his  liability.  What  remained  to  be  done  was  only  of  a  ministerial 
character  and  ought  to  be  proceeded  with.  As  to  the  fourth  inquiry  it 
sounds  like  a  mere  case  of  unliquidated  damages,  but  it  is  so  connected 
with  inquiry  one  that  it  must  go  with  it. 

[CoTTOX,  L.  J. :  —  Inquiries  one  and  four  seem  to  me  quite  distinct.] 
J^ic/hy,  in  reply  :  — 

The  language  of  the  Lord  Chancellor  in  this  case  points  only  at  damages 
for  a  continuing  trespass.  He  gives  damages,  not  measured  by  what  the 
plaintiflTs  lose  or  the  defendants  get,  but  damages  as  to  the  quantum  of 
which  there  is  a  discretion. 

[Cotton,  L.  J. :  —  Is  not  the  benefit  derived  by  the  trespasser  the 
measure  ?] 

Lord  Hatherley  would  not  have  given  that  answer — he  goes  on  what  a 
person  would  usually  have  to  pay  for  a  wayleave.  The  words  of  Lord 
Mansfield  in  Hambly  v.  Trott^  have  always  been  treated  as  laying  down 
the  correct  rule. 

[Baggallay,  L.  J.  :  —  Do  you  say  that  if  a  trespasser  gets  a  pecuniary 
benefit  that  benefit  cannot  be  recovered  I] 

I  do  say  so.  If  a  person  occupies  my  land  and  gets  profit  by  allowing 
persons  to  pass  over  it,  I  cannot  sue  for  the  money  he  so  receives,  my  only 
remedy  is  to  sue  for  damages  for  the  trespass. 

[BowEN,  L.J.  : — Would  not  an  action  for  money  had  and  received  lie 
if  an  office  the  holder  of  which  received  fees  was  usurped  ?] 

Yes ;  the  fees  are  incident  to  the  office,  it  is  like  a  trespasser  on  land 
receiving  rents  from  the  tenants. 

[Baggallay,  L.  J. :  —  What  do  you  say  to  Lord  Mansfield's  illustration 
in  Hambly  v.  Trott  as  to  the  horse  1] 

It  is  the  only  part  of  Hambly  v.  Trott  that  is  against  me,  and  it  is  not 
supported  by  any  other  authority. 

July  9.  BowEN,  L.  J.,  delivered  the  judgment  of  Lord  Justice  Cotton 
and  himself.  His  Lordship,  after  stating  the  proceedings  as  above  down  to 
the  application  to  Mr.  Justice  Pearson,  proceeded  as  follows  :  — 

Mr.  Justice  Pearson  stayed  the  fourth  inquiry  on  the  ground  that  it  had 
necessarily  abated  by  reason  of  the  death  of  R.  Fothergill,  but  refused  to 
stay  the  second  and  third  inquiries. 

The  defendant  Mary  Fothergill  has  appealed  against  his  refusal  to  stay 
1  2  Russ.  &  M.  117.  «  1  Cowp.  371,  376. 


48  PHILLIPS   V.   HOMFRAY;  [CHAP.  L 

the  second  and  third  of  these  inquiries,  while  the  plaintiffs,  by  their  cross- 
appeal,  complain  of  his  decision  that  the  fourth  inquiry  is  to  be  stayed ; 
and  the  question  raised  in  both  appeals  is  how  far  the  respective  inquiries, 
and  the  plaintiffs'  claim  in  virtue  of  which  they  were  directed,  are  affected 
by  the  principle  actio  personalis  moritur  cum  persona. 

The  plaintiffti'  claim  out  of  which  the  second  and  third  inquiries  spring 
is  a  claim  to  be  compensated  for  the  secret  and  tortious  use  made  by  the 
deceased  E.  Fothergill  and  others  during  his  lifetime  of  the  underground 
ways  and  passages  under  the  plaintiffs'  farm  for  the  purpose  of  conveying 
Ihe  coal  and  ironstone  of  R.  Fothergill  and  his  co-trespassers.  The  judg- 
ment of  Mr.  Justice  Pearson  as  to  these  two  inquiries  is  based  upon  the 
view  that  this  description  of  claim  did  not  abate  upon  R  Fothergill's  death, 
but  was  capable  of  being  prosecuted  against  the  assets  in  the  hands  of  his 
executrix.  That  it  is  in  form  a  claim  in  the  nature  of  a  claim  for  trespass, 
the  damages  for  which  were  to  be  measured  by  the  amount  of  wayleave 
which  the  defendants  would  have  had  to  pay  for  permission  to  use  the 
plaintiffs'  ways  and  passages,  cannot  be  disputed.  But  Mr.  Justice  Pear- 
BON  was  of  opinion  that  this  was  one  of  the  class  of  cases  in  which  a  de- 
ceased man's  estate  remained  liable  for  a  profit  derived  by  it  out  of  his 
wrongful  acts  during  his  lifetime.  The  learned  Judge  founded  his  opinion 
upon  certain  language  of  Lord  Mansfield  in  the  case  of  Hambly  v.  Trott,^ 
to  the  effect  that,  so  far  as  the  act  of  the  offender  had  been  beneficial  to 
himself,  his  assets  ought  to  be  answerable.  We  have  therefore  to  consider, 
in  the  first  place,  what  is  the  true  limit  and  meaning  of  the  rule  that  a 
personal  action  dies  upon  a  defendant's  death,  and  whether  there  is,  or  con 
be,  in  the  circumstances  raised  by  the  case,  a  profit  received  by  his  assets, 
which  the  plaintiffs  can  follow. 

The  only  cases  in  which,  apart  from  questions  of  breach  of  contract,  ex- 
press or  implied,  a  remedy  for  a  wrongful  act  can  be  pursued  against  the 
estate  of  a  deceased  person  who  has  done  the  act,  appear  to  us  to  be  those 
in  which  property  or  the  proceeds  or  value  of  property,  belonging  to  an- 
other, have  been  appropriated  by  the  deceased  person  and  added  to  his 
own  estate  or  moneys.  In  such  cases,  whatever  the  original  form  of  action, 
it  is  in  substance  brought  to  recover  property,  or  its  proceeds  or  value,  and 
by  amendment  could  be  made  such  in  form  as  well  as  in  substance.  la 
such  cases  the  action,  though  arising  out  of  a  wrongful  act,  does  not  die 
with  the  person.  The  property  or  the  proceeds  or  value  which,  in  the  life- 
time of  the  wrong-doer,  could  have  been  recovered  from  him,  can  be  traced 
after  his  death  to  his  assets,  and  recaptured  by  the  rightful  owner  there. 
But  it  is  not  every  wrongful  act  by  which  a  wrong-doer  indirectly  benefits 
that  falls  under  this  head,  if  the  benefit  does  not  consist  in  the  acquisition 
of  property,  or  its  proceeds  or  value.  Where  there  is  nothing  among  the 
assets  of  the  deceased  that  in  law  or  in  equity  belongs  to  the  plaintiff,  and 

»  1  Cowp.  874. 


SECT.  II.]  PHILLIPS    v.   HOMFR.\Y.  49 

the  damages  which  have  been  done  to  him  are  unliquidated  and   uncer- 
tain, the  executors  of  a  wrong-doer  cannot  be  sued  merely  because  it  was 
worth  the  wrong-doer's  while  to  commit  the  act  which  is  complained  of,  and 
an  indirect  benefit  may  have  been  reaped  thereby.     Two  illustrations  can 
be  given  of  the  above  distinction  with  regard  to  the  liability  of  executors. 
The  produce,  proceeds,  or  value  of  waste,  equitable  or  legal,  committed  by 
a  tenant  for  life,  can  be  followed  into  the  hands  of  his  executors,  and  re- 
taken from  them.     If  he  has  wrongly  cut  timber,  the  timber  or  its  proceeds 
01*  value  can  be  followed.     But  no  action  for  waste  —  permissive  or  volun- 
tary —  as  such,  lies  against  the  executors  of  a  tenant  for  life.     By  non- 
repairing a  house,  or  by  ploughing  up  ancient  meadow,  the  tenant  for  life 
may  have  indirectly  benefited  himself  or  saved  his  own  pocket.     But  nei- 
ther law  nor  equity  recognize  in  this  indirect  benefit  which  he  may  have 
received  any  ground  for  proceedings  against  his  executors.     A  second  illus- 
tration may  be  given  of  the  distinction  we  have  referred  to.     The  rents,  or 
the  produce  or  profits,  of  land,  which  have  wrongly  been  received  by  a  per- 
son other  than  the  rightful  owner  (as  a  rule,  and  subject  to  certain  excep- 
tions, that  we  need  not  now  discuss),  may  be  pursued  by  the  rightful 
owner,  and  recovered  from  the  wrong-doer,  or  if  he  is  dead  from  his  estate. 
But  there  is  a  sense  in  which  the  term  "profits"  is  used,  with  reference  to 
iand,  to  represent  the  unliquidated  damages  recoverable    in  respect  of  a 
trespass,  as  when  an  action  for  mesne  profits  is  maintained,  to  recover,  not 
the  rents  or  produce  of  land,  or  their  natural  equivalent,  but  compensation 
for  the  bare  possession  wrongfully  taken  and  held  of  the  land  itself.     An 
action  for  mesne  profits  in  this  narrower  sense  will  not  lie  at  common  law 
and  apart  from  statute  against  executors,  and  no  account  would  be  decreed 
in  equity,  except  in  a  case  where  the  profits  were  either  property  or  the 
produce  or  profits  or  value  of  property  actually  received.     This    line   of 
demarcation  has  drawn  itself  in  conformity  with  the  classifications  of  forKis 
of  action  known  to  the  English  law.     As  long  as  the  maxim  actio  personalis 
moritur  cum.  persona  is  preserved  by  the  law  of  this  country,  the  line  drawn 
is  neither  inconvenient  nor  unreasonable.     If  every  wrongful    act   which 
was  attended  consequentially  and  indirectly  with  advantage  to  tlie  wrong- 
doer or  his  pocket  were  to  warrant  an  action  against  executors,  it  would  be 
impossible  to  know  when  executors  were  liable  or  not,   and   the  maxim 
would,  in  fact,  become  a  mere  source  of  litigation.     We  have  not  now  to 
consider  the  policy  of  the  maxim.     It  is  part  of  the  law,  and  while  it  is  so, 
ought  not  to  be  frittered  away. 

The  judgment,  however,  of  Mr.  Justice  Pearson  is  based  upon  certain 
dicta  of  Lord  Mansfield  in  llambly  v.  Trott,*  which  are  in  form  ambiguous, 
and  it  is  necessary  accordingly  to  examine  these  dicta  with  reference  to  the 
history  of  the  maxim  actio  personalu  moritur  cum  persona.  AVIiatever  its 
wisdom  or  policy,  the  rule  with  certain  limitations  and  cx2)lanations  is  as 

»  1  Cowp.  374. 


50  PHILLIPS   V.   HOMFRAY.  [CHAP.  I. 

old  as  the  English  law.  By  the  civil  law,  penal  actions  arising  from  wrong 
were  not  generally  available  against  the  heir,  and  certain  actions  ex  con- 
tractu fell  under  the  same  disability.  By  the  English  law  an  executor 
represents  the  debts  and  property,  but  not  the  person  of  the  testator.  It 
seems  to  have  been  thought  that  there  would  be  an  injustice  in  making 
the  executor  stand  in  the  place  of  the  dead  man  when  the  causes  of  action 
were  purely  personal  (see  Year  Book.)^  "  The  taking  up  of  an  executor- 
ship," says  Bacon  in  his  Abridgment,  Executors,'^  "is  an  engagement  to 
answer  all  debts  of  the  deceased  and  all  undertakings  that  create  a  debt, 
as  far  as  there  are  assets,  but  doth  not  embark  the  executor  in  the  per- 
sonal trusts  of  the  deceased,  nor  is  he  obliged  to  answer  for  his  several  in- 
juries, for  none  can  tell  how  they  might  have  been  discharged  or  answered 
by  the  testator  himself."  And  even  in  some  actions  of  contract,  such  as 
debt,  where  the  testator  could  have  waged  his  law,  the  executor  was  not 
held  liable,  for  this  would  have  been  to  deprive  his  executor  of  the  benefit 
of  the  wager  of  law.  As  regards  all  actions  essentially  based  on  tort,  the 
principle  was  inflexibly  applied.  There  was,  however,  a  species  of  personal 
actions  to  which  the  rule  in  question  was  not  extended.  These  were  such 
as  were  founded  upon  some  obligation,  contract,  debt,  covenant,  or  other 
duty  to  be  performed :  see  Pinchon's  Case ;  *  Wheatley  v.  Lane.*  If  an 
injury  has  been  done  to  the  personal  property  of  the  plaintiff,  for  relief  aris- 
ing out  of  which  assumpsit  could  be  brought  (as  in  the  case  of  actions 
against  carriers  and  bailees),  the  executors  of  the  deceased  might  still  be 
sued.  It  was  urged  before  us  on  behalf  of  the  plaintiffs  that  they  were 
entitled  in  the  present  case  to  waive  the  tort  which  had  been  committed 
against  them  by  the  deceased,  and  to  treat  the  claim  as  substantially  one 
of  implied  contract  or  account,  upon  the  theory  of  an  implied  promise  by 
him  to  pay  fur  what  he  had  done,  or  at  all  events  on  the  principle  that  his 
estate  had  reaped  some  measurable  benefit  or  profit  from  the  wrong,  which 
the  executrix  was  not  entitled  as  against  the  plaintiffs  to  retain.  Reference 
was  made  to  the  analogy  of  the  cases  where  an  action  for  money  had  and 
received  has  been  held  to  be  maintainable  for  the  proceeds  of  goods  wrong- 
fully sold,  and  to  a  more  doubtful  class  of  authorities,  in  which  it  has  been 
suggested  that  use  and  occupation  would  lie  for  the  enjoyment  of  lands 
occupied,  even  in  the  absence  of  any  demise  by  the  plaintiff.  It  seems  to 
us,  as  we  have  said,  that  the  profits  arising  from  a  wrong  done  by  a  de- 
ceased man  which  can  be  followed  against  his  estate  are  only  such  profits 
as  take  the  shape  of  property  or  the  proceeds  or  value  of  property  with- 
drawn from  the  rightful  owner  and  acquired  by  the  wrong-doer.  But  in 
order  to  understand  Lord  Mansfield  and  the  argument  to  which  reference 
has  been  made,  it  is  desirable  to  begin  with  some  cases  in  the  reign  of 
Elizabeth  which  illustrate  the  matter. 

1  19  H.  6,  66  B.  2  7th  Ed.  vol.  iii.  p.  537. 

8  9  Rep.  86  b.  *  1  Wms.  Saund.  216  a. 


SECT.  II.]  PHILLIPS   V.   HOMFRAY.  51 

The  first  is  that  of  Sir  Henry  Sherrington  (cited  in  Savile  ^  and  referred 
to  by  Lord  Mansfield  in  Hambly  v.  Trott).^  Sir  Henry  Sherrington  had  cut 
during  his  lifetime  and  converted  to  his  own  use  certain  oaks  and  growing 
trees  upon  land  belonging  to  the  Queen.  After  his  death  the  Attorney- 
General  exhibited  an  information  against  his  executrix,  and  Chief  Justice 
Manwood  in  giving  judgment  has  used  language  which  it  seems  to  us  has 
been  misunderstood  :  "  In  every  case,"  he  says,  "  in  which  a  price  or  value 
has  been  set  upon  a  thing  in  which  the  offence  is  committed,  if  the  offender 
dies  his  executors  shall  be  chargeable.  As  in  this  case  the  information  is 
for  cutting  100  oaks  to  the  value  of  £100,  or  for  taking  20  cattle  of  the 
Queen,  price  £20,  the  executors  are  chargeable,  but  where  the  action  or 
information  is  fur  trampling  the  herbage,  etc.,  ad  dainnian,  the  executor 
shall  not  be  chargeable."  The  point  of  this  judgment  seems  to  us  to  be 
that  the  deceased  had  converted  the  Queen's  property  to  his  own  use  dur- 
ing his  lifetime,  and  the  Attorney-General  was  held  entitled  to  recover  for 
the  Queen  the  property,  or  in  default  the  value  which  represented  the 
property  or  its  proceeds.  In  Sir  Brian  Tucke's  Case  in  the  same  reign,' 
it  was  held  by  the  Barons  of  the  Exchequer  that  the  executor  of  an  execu- 
tor should  not  be  charged  with  a  devastavit  made  by  the  executor  of  the 
first  testator,  "  No,  not  in  the  case  of  the  King,  because  it  is  a  personal 
wrong  only."  The  collocation  of  these  two  cases  points  to  the  distinction 
which  we  have  drawn.  Tlie  proceeds  or  value  of  actual  property  acquired 
wrongfully  by  the  testator  can  be  recovered  against  an  executor,  but  the 
mere  fact  that  the  wrongful  act  or  neglect  saved  the  testator  from  expense 
is  not  sufficient  justification  for  suing  his  executor. 

In  Tooley  v.  Windham  *  the  plaintiff  brought  an  action  against  the  de- 
fendant under  the  following  circumstances.  The  defendant's  father  in  his 
lifetime  had  taken  the  profits  of  certain  lands,  whereupon  the  plaintiff  had 
purchased  a  writ  out  of  Chancery  against  the  defendant  with  the  intention 
of  exhibiting  a  bill  against  him.  Upon  the  return  of  the  writ  for  the  said 
profits  the  defendant,  in  consideration  that  the  plaintiff  would  forbear  his 
suit,  promised  the  plaintiff  that  if  he  would  prove  that  his  father  had  taken 
the  profits  or  had  had  the  possession  of  the  lands  under  the  title  of  the 
plaintiff's  father,  he  the  defendant  would  pay  the  plaintiff  for  the  profits  of 
the  land.  The  court  held  that  this  was  no  consideration  for  the  promise, 
on  the  gi-ound  that  the  taking  of  the  profits  of  the  plaintiff's  lands  by  the 
defendant's  father  was  a  personal  tort  for  which  neither  the  executor  nor 
heir  could  be  made  to  answer.  So  far  as  we  are  aware,  an  action  for  mesne 
profits  (or  bare  damages  for  wrongful  possession  or  occupation  of  land)  has 
never  been  considered  maintainable  at  common  law  against  the  executors 
of  the  person  who  was  wrongfully  in  possession. 

J  r.ige  40.  2  1  Cowp.  371. 

8  3  Leon.  24L  *  Cro.  Eliz.  206. 


52  PHILLIPS   V.   HOMFRAY.  [CHAP.  L 

But  the  language  of  Lord  Mansfield  in  the  case  of  Hambly  v.  Trott  ^  is 
rehed  upon  in  the  judgment  of  Mr.  Justice  Pearson  as  going  beyond  the 
above  hue,  and  it  is  important,  therefore,  to  examine  it  in  detail.  That 
action  was  an  action  of  trover  brought  against  an  administrator  with  the 
will  annexed  for  a  conversion  by  the  testator  in  his  lifetime.  The  plea 
was  that  the  testator  was  not  guilty.  A  verdict  having  been  found  for  the 
plaintiff,  the  court  unanimously  arrested  the  judgment  on  the  ground  that 
the  cause  of  action  as  laid  was  a  personal  tort  which  died  with  the  person. 
This  was  in  accordance  with  the  decision  in  Baily's  Case.^  The  judgment 
in  Hambly  v.  Trott  can  therefore  be  no  authority  for  the  appellants'  con- 
tention ;  but  the  language  of  Lord  Mansfield,  which  has  since  been  cited 
with  approval  by  the  highest  tribunals,  is  of  course  entitled  to  the  utmost 
weight.  Lord  Mansfield  in  the  first  place  observes  that  no  action  of  tort 
where  the  plea  must  be  not  guilty  will  lie  against  an  executor.  "  On  the 
face  of  such  a  record  the  cause  of  action  arises  ex  delicto,  and  all  private 
criminal  injuries  or  wrongs,  as  well  as  all  public  crimes,  are  buried  with 
the  offender."  This  is  the  inflexible  rule.  In  mitigation  of  the  apparent 
hardship  Lord  Mansfield  proceeds,  obiter  dicta,  to  point  out  that  in  most 
cases  where  trover  lies  against  the  testator  another  action  might  be  brought 
against  the  executor  which  will  serve  the  purpose,  and  he  gives  the  follow- 
ing illustration.  An  action  on  the  custom  of  the  realm  against  a  common 
carrier  is  for  a  tort  and  a  supposed  crime.  The  plea  is  not  guilty,  there- 
fore such  action  will  not  lie  against  an  executor.  But  assumpsit,  which  is 
another  action  for  the  same  cause,  will  lie  instead.  "  So,"  continues  Lord 
Mansfield,  "  if  a  man  takes  a  horse  from  another,  and  bring  him  back  again, 
an  action  of  trespass  will  not  lie  against  his  executor,  though  it  would 
against  him  ;  but  an  action  for  the  use  and  hire  of  the  horse  will  lie  against 
the  executor."  And  in  further  illustration  of  this  distinction  Lord  Mans- 
field points  out  that  in  Baily's  Case  the  executor  would  have  been  liable 
for  the  value  of  the  goods  wrongfully  sold  by  the  testator,  just  as  Sir 
Henry  Sherrington's  estate  ^  was  liable  for  the  value  of  the  trees  he  had 
cut  and  carried  away.  It  is  with  reference  to  the  above  distinction  that 
Lord  Mansfield  goes  on  to  use  the  language  which  we  think  has  been  mis- 
understood. "  Here,  therefore,  is  a  fundamental  distinction.  If  it  is  a  sort 
of  injury  by  which  the  offender  acquires  no  gain  to  himself  at  the  expense 
of  the  sufferer,  as  beating  or  imprisoning  a  man,  etc.,  there  the  person  in- 
jured has  only  a  reparation  for  the  delictum  in  damages  to  be  assessed  by  a 
jury.  But  where,  besides  the  crime,  property  is  acquired  which  benefits 
the  testator,  there  an  action  for  the  value  of  the  property  shall  survive 
against  the  executor.  As,  for  instance,  the  executor  shall  not  be  charge- 
able for  the  injury  done  by  his  testator  in  cutting  down  another  man's  trees, 
but  for  the  benefit  arising  to  his  testator  for  the  value  or  sale  of  the  trees 
he  shall.  So  far  as  the  tort  itself  goes  an  executor  shall  not  be  liable,  and 
1  1  Cowp.  375.  2  Sir  T.  Raym.  71.  ^  Savile,  40. 


SECT.  II.]  PHILLIPS   V.   IIOMFRAY.  53 

therefore  it  is  that  all  public  and  all  private  crimes  die  with  the  offender, 
and  the  executor  is  not  chargeable ;  but  so  far  as  the  act  of  the  oftender 
is  beneficial  his  assets  ought  to  be  answerable,  and  his  executor  therefore 
shall  be  charged."  It  seems  to  us  that  Lord  Mansfield  does  no  more  than 
indicate  that  there  is  a  class  of  cases  in  which  assumpsit  can  be  brought 
against  a  wrong-doer  to  recover  the  property  he  has  taken  or  its  proceeds  or 
value,  and  that  in  such  cases  the  action  will  survive  against  the  executor. 
In  the  illustration  given  by  him  of  the  horse,  he  does  not  mean  that  an 
action  for  the  use  and  hire  of  a  horse  wrongfully  taken  will  always  lie 
against  an  executor,  but  that  it  will  lie  whenever  a  similar  action  would 
have  lain  against  the  wrong-doer  himself.  The  case  he  puts  is  the  case  of  a 
horse  taken  and  restored,  not  of  a  horse  taken  and  held  under  an  adverse 
claim,  and  we  are  not  prepared  to  say  that,  if  absolutely  nothing  appeared 
in  evidence  except  that  a  horse  was  taken  and  was  afterwards  brought  back 
again,  the  owner  might  not  recover  for  the  use  and  hire  of  the  horse  on  the 
hypothesis  of  an  implied  contract  to  pay  for  him.  It  is  in  such  a  sense 
that  Lord  Ellexborough,  in  Foster  v.  Stewart,^  clearly  understood  Lord 
Mansfield's  language.  We  see  nothing  in  the  language  of  Lord  Chelmsford 
in  the  House  of  Lords  in  Peek  v.  Gurney  ^  to  indicate  that  he  understood 
it  otherwise.  If  so,  the  true  test  to  be  applied  in  the  present  case  is 
whether  the  plaintiffs'  claim  against  the  deceased  R.  Fothergill,  in  respect  of 
which  the  second  and  third  inquiries  were  directed  in  his  lifetime,  belongs 
to  the  category  of  actions  ex  delicto,  or  whether  any  form  of  action  against 
the  executors  of  the  deceased,  or  the  deceased  man  in  his  lifetime,  can  be 
based  upon  any  implied  contract  or  duty.  In  other  words,  could  the 
plaintiffs  have  sued  tlie  deceased  at  law  in  any  form  of  action  in  which 
"  Not  guilty  "  would  not  be  the  proper  plea?  If  such  alternative  form  of 
action  could  be  conceived  it  must  be  either  an  action  for  the  use,  by  the 
plaintiff's  permission,  of  the  I'laintiff's  roads  and  p-issagcs,  similar  in  prin- 
ciple, though  not  identical,  with  an  action  for  the  use  and  occupation  of 
the  plaintiffs'  land.  Or  it  must  be  in  the  shape  of  an  action  for  money  had 
and  received,  based  upon  the  supposition  that  funds  are  in  the  hands  of  the 
executors  which  properly  belong  in  law  or  in  equity  to  the  plaintiffs.  We 
do  not  believe  that  the  principle  of  waiving  a  tort  and  suing  in  contract 
can  be  carried  further  tlian  this,  —  that  a  plaintiff  is  entitled,  if  he  chooses 
it,  to  abstain  from  treating  as  a  wrong  the  acts  of  the  defendant  in  cases 
where,  independently  of  the  question  of  wrong,  the  plaintiff  could  make  a 
case  for  relief.  There  have  been,  no  doubt,  instances  in  which,  nothing 
further  appearing  in  evidence  but  that  one  person  is  the  owner  of  land  and 
that  another  had  taken  |)ossession  of  and  enjoyed  it,  an  action  for  use  and 
occupation  under  the  statute  has  been  upheld  :  see  Ilellier  v.  Sillcox.* 
In  Biich  cases  the  inference,  in  the  absence  of  proof  to  tho  contrary,  has 
been  allowed  to  be  drawn,  that  the  enjoyment  was  by  permission  of  tha 
>  3  M.  &  R.  191.  2  i^.  It    G  H.  L.  393.  «•  19.  L  J.  CQ.  B.),295. 


54  PHILLIPS   V.    HOMFRAY.  [CHAP.  L 

rightful  owner.  On  a  somewhat  similar  principle  an  action  by  the  lord  of 
a  market  for  stallage  was  held  maintainable  against  a  person  who  fixed  a 
stall  in  the  soil  withont  leave  or  license.  The  authority  of  this  latter  case 
has  been  questioned  (see  Turner  v.  Cameron's  Coalbrook  Steam  Coal  Com- 
pany) ;  ^  and  actions  for  use  and  occupation,  according  to  the  better  opinion, 
have  been  confined  to  the  class  of  cases  where  defendant  is  not  a  trespasser 
setting  up  an  adverse  title,  and  where  there  are  no  circumstances  that  neg- 
ative the  implication  of  a  contract :  see  Churchward  v.  Ford, ^  per  Pollock, 
C.  B.  5  Birch  v.  Wright.'  No  doubt  the  mere  enjoyment  by  one  man  of 
another  man's  property,  real  or  personal,  may  be  had  under  such  circum- 
stances as  leave  still  open,  as  a  reasonable  inference,  the  presumption  that 
it  is  taken  on  the  terras  of  payment,  just  as  a  man  who  takes  a  bun  from 
the  refreshment  counter  at  a  railway  station,  takes  it  on  the  implied  prom- 
ise to  jmy  for  it.  So  actions  of  assumpsit  have  been  held  to  lie  for  the 
rents  of  land  improperly  received  under  pretence  of  title  :  see  Bacon's 
Abridgement,  Assumpsit ;  *  Clarence  v.  Marshall,  per  Bayley,  B.^ 

One  of  the  most  remarkable  instances  of  waiver  of  a  tort  is  to  be  found 
in  the  case  of  Lightly  v.  Clouston,^  where  the  master  of  an  appi-entice  who 
had  been  seduced  from  his  service  to  work  for  another  person  was  held 
justified  in  waiving  the  tort  and  bringing  an  action  of  indebitatus  assumpsit 
for  work  and  labor  done  against  the  tortfeasor.  Lord  Mansfield,  in  decid- 
ing the  case,  referred  to  the  cases  of  the  wrongful  sale  of  goods,  where,  if 
the  rightful  owner  chooses  to  sue  for  the  produce  of  the  sale,  he  may  do  it, 
the  practice  being  an  advantage  and  not  a  disadvantage  to  the  defend- 
ant. The  case  was  decided  upon  the  ground  that  the  labor  of  the  appren- 
tice belonged  to  his  master,  who  might  insist  on  an  equivalent  for  it,  or  at 
all  events,  that  the  apprentice  could  not  contract  for  the  benefit  of  anybody 
except  his  rightful  owner  :  see  per  Lord  Ellenborough  in  Foster  v.  Stewart.' 
And  actions  in  which  the  owners  of  goods  wrongfully  sold  were  held  en- 
titled to  waive  the  tort,  and  to  recover  in  assumpsit  for  the  proceeds,  had 
become  familiar  to  the  common  law  as  far  back  as  towards  the  end  of  the 
17th  century:    see  Lamine  v.  Dorrell.* 

The  difficulties  of  extending  the  above  principle  to  the  present  case  ap- 
pear to  us  insuperable.  The  deceased,  R.  Fothergill,  by  carrying  his  coal 
and  ironstone  in  secret  over  the  plaintiffs'  roads  took  nothing  from  the 
plaintiffs.  The  circumstances  under  which  he  used  the  road  appear  to  us 
to  negative  the  idea  that  he  meant  to  pay  for  it.  Nor  have  the  assets  of 
the  deceased  defendant  been  necessarily  swollen  by  what  he  has  done.  He 
saved  his  estate  expense,  but  he  did  not  bring  into  it  any  additional  prop- 
erty or  value  belonging  to  another  person.  The  case  of  Kirk  v.  Todd  * 
seems  to  us  materially  in  point.     There  the  owners  of  certain  dye-works 

1  5  Ex.  932.  2  2  H.  &  N.  446.  8  i  T.  R.  378. 

4  7th  Ed.  vol.  i.  p.  336.  s  2  C.  &  M.  495.  «  1  Taunt.  112. 

7  3  M.  &  S.  191.  8  2  Ld.  Raym.  1216.  ^  21  Ch.  D.  484,  488. 


SECT.  II.]  nilLLIPS   V.   HOMFRAY.  55 

sued  the  original  defendants  for  fouling  and  polluting  a  brook.  It  was 
held  that  the  action  would  not  survive  against  their  executors.  The  late 
Master  of  the  Rolls  used  the  following  language  :  "  This  was  an  action  on 
a  simple  tort.  It  did  not  appear  that  the  defendant  had  got  any  benefit  hy 
fouling  the  plaiutiflF's  stream,  he  had  only  injured  the  plaintiff.  As  I 
understand  the  rule  at  common  law,  it  was  this,  —  you  could  not  sue  execu- 
tors for  a  wrong  committed  by  their  testator  for  which  you  could  recover 
only  unliquidated  damages.  That  rule  has  never  been  altered  except  by 
tlie  Act  3  &  4  Will,  -i,  c.  42,  which  allowed  the  executors  to  be  sued  in 
certain  cases,  but  with  the  limitation  that  the  injury  must  have  been  com- 
mitted not  more  than  six  months  before  the  death  of  the  testator.  That 
was  not  so  here  ;  therefore  the  statute  did  not  apply,  and  the  rule  of  the 
common  law  remained  in  its  simplicity."  In  every  case  where  one  man 
fouls  the  flow  of  water  to  which  another  is  entitled  he  probably  saves  him- 
self expense  by  doing  so.  But  the  benefit  to  which  the  Master  of  the  Rolls 
alludes  appears  to  us  to  be  some  beneficial  property  or  value  capable  of 
being  measured,  followed,  and  recovered. 

It  remains  to  be  considered  whether  there  is  any  equitable  doctrine 
which  can  extend  or  vary  the  above  rules  of  the  common  law.  We  can  see 
none.  An  action  for  account  will  only,  under  such  circumstances,  lie  where 
tlie  defendant  has  something  in  his  hands  repi-esenting  the  plaintiffs'  pro- 
perty or  the  proceeds  or  value  of  it.  But  if  there  were  any  such  it  could 
be  recovered  at  law  as  well  as  in  eq^ut3^  It  is  true  that  the  wrongful  acts 
complained  of  were  done  in  secret,  but  even  if  such  concealment  could 
raise  in  favor  of  the  plaintiffs  an  equity  to  be  relieved  from  the  application 
of  the  principle  actio  personalis  moritur  cum  persona,  which  we  doubt,  the 
fraud  in  this  case  was  discovered  during  the  lifetime  of  the  deceased,  R. 
Fothergill.  The  mere  circumstance  of  the  defendant's  death,  after  the  de- 
cree and  before  the  accounts  taken,  would  not  raise  any  equity  in  the 
plaintiffs'  favor,  and  as  far  as  we  can  see  the  equity  authorities  relied  upon 
in  argument  by  the  plaintiffs  do  not  assist  them.  In  Bishop  of  Winchester 
V.  Knight  ^  it  was  held  that  the  lord  of  the  manor  might  maintain  a  bill  for 
an  account  of  ore  dug  or  timber  cut  by  the  defendant's  testator.  Lord 
Chancellor  Cowper  in  giving  judgment  said,  "  It  would  be  a  reproach  to 
equity  to  say,  that  where  a  man  has  taken  my  property,  as  my  ore,  or  tim- 
ber, and  disposed  of  it  in  his  lifetime,  and  dies,  that  in  this  case  I  must  be 
without  remedy."  But  he  added,  that  the  trespass  of  breaking  up  meadow 
or  ancient  pasture-ground  dies  with  the  person.  If  the  plaintiffs  in  the 
present  action  were  to  recover,  it  is  difficult  to  see  why  a  landlord  should 
not  be  entitled  in  equity  to  an  account  against  the  executors  of  his  tenant, 
for  a  profit  indirectly  derived  or  expense  saved  by  the  testator  through 
breaking  up  ancient  meadow  or  pasture  land.  In  Pulteney  v.  Warren  ^  an 
account  of  mesne  profits  was  decreed   against   executors   on   the  special 

»  1  P.  Wnis.  406,  407.  *  6  Ves.  73. 


56  PHILLIPS    V.   HOMFRAY.  [CHAP.  I. 

ground  that  the  plaintiff  had  been  prevented  by  injunction  afterwards  dis- 
solved from  proceeding  in  ejectment  against  the  testator  in  his  lifetime, 
and  that  it  ought  to  have  been  one  of  tlie  terms  on  which  the  injunction 
was  granted  that  the  testator  or  his  estate  would  compensate  the  plaintiff 
against  the  loss  of  such  mesne  profits  if  the  injunction  turned  out  to  be 
unjust.  It  would  follow  that,  had  not  such  special  grounds  existed,  the 
bill  for  an  account  of  mesne  profits  would  have  been  held  not  maintainable 
against  the  executors.  Pulteney  v.  "Warren  is  therefore  an  authority  wliich 
bears  against  the  plaintiffs  in  the  present  case.  In  Monypenny  v.  Bristow  ^ 
a  suit  was  held  maintainable  against  the  executors  for  rents  received  during 
the  continuance  in  possession  of  the  testatrix,  but  the  rents  in  question 
seem  to  have  been  rents  which  had  actually  been  paid  over  to  the  testatrix 
and  fell  within  the  description  of  property  taken  by  the  trespasser. 

The  history  of  the  case  of  Marquis  of  Lansdowne  v.  Marchioness  Dowa- 
ger of  Lansdowne  ^  appears  to  us  to  show  that  the  doctrine  of  the  courts  of 
equity  is  in  exact  conformity  with  the  distinction  we  have  pointed  out.  A 
bill  was  filed  by  a  remainderman  against  the  representative  of  a  deceased 
tenant  for  life  without  impeachment  for  waste.  Two  causes  of  complaint 
were  put  forward  by  the  bill.  The  first  that  the  deceased  tenant  for  life 
had  been  guilty  of  equitable  waste  by  cutting  down  ornamental  timber  and 
young  trees  about  the  property.  A  second  cause  of  complaint  was  dilap- 
idations which  he  had  permitted  in  and  about  the  mansion-house.  The 
defendants  demurred  to  so  much  of  the  bill  as  related  to  the  former  griev- 
ance, and  the  demurrer  was  decided  in  favor  of  the  plaintiff  on  the  ground 
that  the  plaintiff  was  entitled  to  the  proceeds  of  the  equitable  waste,  and 
to  relief  against  the  assets  of  the  tenant  for  life  so  far  as  they  were  aug- 
mented by  such  proceeds,  and  an  account  was  directed  as  to  the  equitable 
waste.  The  second  cause  of  complaint,  which  related  to  the  dilapidations, 
was  dealt  with  on  the  hearing.'  The  Master  of  the  Rolls  decided  that  no  ac- 
count of  the  dilapidations  could  be  decreed,  observing  that  "with  respect  to 
incumbents  the  law  was  otherwise,  and  accordingly  suits  against  their  rep- 
resentatives were  very  common,  but  no  instance  of  such  suits  by  remainder- 
men had  occurred."  It  has  always  been  held  that  ecclesiastical  dilapidations 
by  deceased  incumbents  do  not  fall  within  the  rule  actio  personalis  moritur 
cum  persona.  The  fact  that  an  account  was  granted  in  respect  of  the 
produce  of  the  timber  wrongly  cut,  but  refused  in  respect  of  the  dilapida- 
tions, shows  that  the  profit  which  equity  follows  into  the  hands  of  the 
executors  must  be  some  profit  of  which  the  plaintiff  has  been  deprived, 
and  not  merely  a  negative  benefit  which  the  testator  may  indirectly  have 
acquired  by  saving  himself  the  expense  of  performing  his  duty. 

In  Gardiner  v.  Fell  *  no  doubt  was  suggested  as  to  the  right  of  the  court 
to  decree  an  account  of  rents  and  profits  against  the  personal  representa- 

1  2  Russ.  &  My.  117.  *  1  Madd.  116. 

8  1  Jac.  &  W.  522.  *  1  Jac.  &  W.  22. 


SECT.  II.]  PHILLIPS    I".    HOMFRAY.  57 

tives  of  a  person  who  had  taken  possession  under  a  mistake  of  hvw.  It 
appears,  however,  to  be  probable,  on  the  facts  of  the  case,  tliat  the  rents 
and  profits  in  question  were  rents  and  profits  actually  received  in  the  shape 
of  moneys  or  actual  property  by  the  deceased,  as  distinguished  from  the 
mere  wrongful  use  and  occupation  of  laud  or  houses. 

It  was  pressed  upon  us  by  the  counsel  for  the  plaintiffs  that,  the  decree 
having  been  made  and  the  inquiries  directed  during  the  lifetime  of  the  de- 
ceased R.  Fothergill,  his  liability  must  be  taken  to  have  been  pronounced, 
and  that  what  remained  to  be  done  in  the  action  was  of  a  ministerial  char- 
acter only,  and  would  not  be  affected  by  the  maxim  actio  personalis  moritur 
aim  persona.  'We  cannot  take  this  view.  The  claim  of  the  plaintiffs  is  in 
substance,  so  far  as  these  inquiries  are  concerned,  an  action  for  trespass. 
The  inquiries,  whatever  the  form  of  language  in  which  they  are  directed, 
are  an  assessment  of  damages,  and  until  they  have  been  completed  the  ac- 
tion is  still  undetermined.  It  is  of  the  essence  of  the  rule  that  claims 
which  are  indeterminate  in  their  character  shall  not  be  pursued  against 
the  estate  of  a  person  after  his  death.  If  the  claim  is  one  for  unliquidated 
damages,  and  has  not  been  perfected  by  judgment  at  the  time  of  the  death 
of  the  defendant,  the  rule  applies  :  Smith  v.  Eyles.^  It  appears  to  us  ac- 
cordingly that  the  claims  of  the  plaintiffs  to  which  the  second  and  third 
inquiries  are  directed  are  claims  for  unliquidated  damages  iu  respect  of  a 
wrong  done,  and  that  the  object  of  the  inquiries  is  to  assess  such  unliqui- 
dated damages.  Such  claims,  and  the  inquiries  which  relate  to  them, 
abated  in  our  opinion  upon  the  death  of  the  deceased,  R.  Fothei'gill.  The 
appeal  of  the  defendant,  Mary  Fothergill,  as  to  the  second  and  third  inquiries 
will,  therefore,  be  allowed,  with  costs.  A  fortiori,  the  claim  in  respect  of 
which  the  fourth  inquiry  was  directed,  is  a  pure  claim  for  damages  for  a 
wrongful  act.  It  follows  that,  in  our  opinion,  such  claim  and  the  inquiry 
under  it  abated  by  the  death  of  R.  Fothergill.  The  plaintiffs'  cross-appeal 
must  be  dismissed  accordingly,  with  costs.  The  order  which  Mr.  Justice 
PE.vasoN  made  as  to  the  fourth  inquiry  will  thus  be  extended  to  the  second 
and  third  inquiries. 

Baogallay,  L.  J  :  —  I  regret  that,  as  regards  the  appeal  of  Mrs.  Fother- 
gill, I  have  arrived  at  a  conclusion  different  from  that  which  has  been 
arrived  at  l)y  the  other  members  of  the  court.  I  am  of  o|)inion  that  the 
appeal  should  be  dismissed,  for  tlie  reasons  which  I  am  about  to  state. 
Though  the  case  of  Ilambly  v.  Trott  ^  has  been  very  fully  considered  by 
Mr.  Justice  Pkarso.v  in  the  course  of  his  judgment,  and  also  by  my  col- 
leagues in  that  which  has  been  just  delivered,  I  desire  to  add  my  own  com- 
ments upon  it,  as  its  true  effect  has,  in  my  opinion,  been  to  some  extent 
misappreheudeil. 

The  judgment  in  Ilambly  v.  Trott  ^  is  generally  referred  to  as  that  of 
Lord  Manskield,  but  it  expressed  the  unanimous,  fully  considered  opinion 
1  2  Atk.  385.  2  1  Cowp.  371. 


58  PHILLIPS   V.   HOMFRAY.  [CHAP.  I. 

of  the  court,  which  inchided  Justices  Acton  and  Ashurst,  as  well  as  Lord 
Mansfield,  and  was  delivered  after  the  case  had  been  twice  argued.  The 
action  was  in  trover  against  an  administrator  with  will  annexed  ;  the  dec- 
laration laid  an  unlawful  conversion  by  the  testator  to  his  own  use  of  cer- 
tain sheep,  pigs,  goats,  oats,  and  cider;  the  plea  was  that  the  testator  was 
not  guilty  ;  the  verdict  being  for  the  plaintiff,  the  court  was  moved  on 
behalf  of  the  defendant  in  arrest  of  judgment  upon  the  ground  that  the 
wrongful  act  of  the  testator  was  a  personal  tort  which  died  with  the  person ; 
a  rule  to  show  cause  was  granted,  and  it  was  upon  cause  being  shown  that 
the  judgment  was  given.  At  the  close  of  the  arguments  on  the  first  occa- 
sion Lord  Mansfield  said,  "  I  shall  be  yerj  sorry  to  decide  that  trover  will 
not  lie  if  there  is  no  other  remedy  for  the  right,"  and  after  an  opinion  ex- 
pressed by  the  other  judges  that  as  then  advised  they  thought  the  action 
maintainable,  the  court  ordered  the  matter  to  stand  over  for  further  argu- 
ment. Lord  Mansfield  adding,  "  The  criterion  I  go  upon  is  this,  can  jus- 
tice possibly  be  done  in  any  other  form  of  action  ? "  After  the  second 
argument  on  the  24th  of  January,  177G,  the  court  took  time  to  consider 
its  judgment,  and  on  the  12th  of  February  in  the  same  year  held  that  the 
judgment  must  be  arrested.  But  it  is  important  to  notice  the  grounds 
upon  which  the  court  arrived  at  this  conclusion.  After  stating  (a)  that 
the  maxim  "  actio  personalis  vioritur  curn  perso7ia  was  not  generally  true 
and  much  less  universally  so,  and  that  it  left  the  law  undefined  as  to  the 
kind  of  personal  actions  which  die  with  the  person  or  survive  against  the 
executor,  and  (b),  that  an  action  of  trover  was  in  form  a  fiction,  and  in 
substance  founded  on  property,  for  the  equitable  purpose  of  recovering  the 
value  of  the  plaintiffs'  specific  property  used  and  enjoj-ed  by  the  defendant, 
and  that  if  no  other  action  could  be  brought  against  the  executor  it  seemed 
unjust  and  inconvenient  that  the  testator's  assets  should  not  be  liable  fur 
the  value  of  what  belonged  to  another  man  which  the  testator  had  reaped 
the  benefit  of;  and  (c),  that  the  court,  deeming  the  matter  well  deserved 
consideration,  had  carefully  examined  all  the  cases  upon  the  subject,  Lord 
Mansfield  proceeded  to  enunciate  the  conclusions  at  which  the  court  had 
arrived  as  to  actions  which  survived  against  an  executor,  and  those  which 
died  with  the  person,  distinguishing  between  those  which  survived  or  died 
on  account  of  the  cause  of  action,  and  those  which  survived  or  died  ou 
account  of  the  form  of  action,  a  distinction  which  it  is  in  my  opinion  most 
important  to  bear  in  mind. 

As  regards  those  actions  which  survive  or  die  on  account  of  the  cause 
of  action,  Lord  Mansfield  expressed  himself  as  follows :  ^  "  Where  the 
cause  of  action  is  money  due,  or  a  contract  to  be  performed,  gain  or  acqui- 
sition of  the  testator  by  the  work  and  labor  or  property  of  another,  the 
action  survives  against  the  executor.  But  where  the  cause  of  action  is  a 
tort,  or  arises  ex  delicto,  supposed  to  be  by  force  and  against  the  King's 

1  1  Cowp.  375. 


SECT.  II.]  PHILLIPS   V.   HOMFRAY.  59 

peace,  there  the  action  dies  :  as  battery,  folse  imprisonment,  trespass, 
words,  nuisance,  obstructing  lights,  diverting  a  water-course,  escape  against 
the  sheriff,  and  many  others  of  the  like  kind,"  and  as  regards  those  actions 
which  survive  or  die  in  respect  of  the  form  of  action,  he  went  on  to  say  as 
follows:  "In  some  actions  the  defendant  could  have  waged  his  law,  and 
therefore  no  action  in  that  form  lies  against  an  executor.  But  now  other 
actions  are  substituted  in  their  room  upon  the  very  same  cause  which  do 
survive  and  lie  against  the  executor.  No  action  where  in  form  the  declara- 
tion must  be  quare  vi  et  armis  et  contra  pacem,  or  where  the  plea  must  be, 
as  in  this  case,  that  the  testator  was  not  guilty,  can  lie  against  the  executor. 
Upon  the  face  of  the  record  the  cause  of  action  arises  ex  delicto,  and  all 
private  criminal  injuries  or  wrongs,  as  well  as  all  public  crimes,  are  buried 
with  the  offender."  But  having  said  thus  much  Lord  Mansfield  added, 
that  in  most,  if  not  in  all,  of  the  cases  where  trover  lies  against  the  testator 
another  action  might  be  brought  against  the  executor  which  would  answer 
the  purpose.  In  applying  the  rules  so  enunciated  to  the  circumstances  of 
the  case  then  under  consideration,  the  court  held  that  the  form  of  the  plea 
that  the  testator  was  not  guilty  was  decisive,  and  that  the  judgment  must 
be  arrested,  but  added  that  no  mischief  would  be  thereby  occasioned,  be- 
cause, so  far  as  the  cause  of  action  did  not  arise  ex  delicto  or  ex  maleficio  of 
the  testator,  but  was  founded  on  a  duty  which  the  testator  owed  to  the 
plaintiff,  another  form  of  action  might  be  brought.  It  would  appear  then 
that  the  judges  who  disposed  of  Hambly  v,  Trott^  were  of  opinion,  first, 
that  the  cause  of  action  was  such  that  the  executors  might  have  been  made 
liable  ;  secondly,  that  by  reason  of  the  form  of  the  action,  the  declaration 
being  in  trover,  and  the  pica  that  the  testator  was  not  guilty,  it  could  not 
be  maintained  against  the  executors ;  and  thirdly,  and  notwithstanding  the 
arrest  of  judgment  in  the  pending  action,  another  form  of  action  might  be 
brought  and  maintained  against  the  executors.  It  is  to  my  mind  clear 
that  the  judges  were  of  opinion  that  the  merits  were  with  the  plaintiff,  but 
that  they  were  precluded  by  the  technicalities  of  the  pleadings  from  giving 
him  that  to  which  they  deemed  him  morally  entitled.  That  this  was  their 
view  is  supported  by  the  comments  of  Lord  Mansfield  upon  two  older 
cases,  which  he  cited  in  the  course  of  the  judgment.  In  the  first  of  those 
cases,  which  was  later  in  date  than  the  other,  and  which  he  cited  from  Sir 
Thomas  Raymond,  the  plaintiff  declared  that  he  was  possessed  of  a  cow 
which  he  delivered  to  the  testator  to  keep  for  the  use  of  the  plaintiff,  which 
cow  the  testator  sold,  and  disposed  of  the  money  to  his  own  use,  and  that 
neither  the  testator  nor  the  defendant,  his  executor,  had  ever  paid  the 
money.  Commenting  upon  tliis  case  Lord  Mansfield  said  :  *  "  Upon  this 
state  of  the  case  no  one  can  doubt  but  that  the  executor  was  liable  for  the 
value.  But  the  special  injiiry  charged  obliged  him  to  plead  that  the  testa- 
tor was  not  guilty."     That  is  to  say,  the  cause  of  action  was  such  as  to 

1  1  Cowp.  371.  «  1  Cowi).  376. 


60  PHILLIPS   V.   HOMFRAY.  [CHAP.  L 

render  the  executor  liable,  but  a  form  of  action  was  adopted  which  obliged 
the  defendant  to  plead  that  the  testator  was  not  guilty.  The  jury  found 
the  defendant  guilty,  but  on  motion  for  arrest  of  judgment  it  was  held 
that  the  executor  ought  not  to  be  chargeable.  The  other  case  cited  was 
that  known  as  Sir  Henry  Sherrington's.^  He  had  cut  down  trees  upon 
the  land  of  Queen  Elizabeth,  and  converted  them  to  his  own  use.  Upon 
an  information  against  his  widow,  Justice  Manwood,  in  the  course  of  his 
judgment,  said  :  "In  every  case  where  any  price  or  value  is  set  upon  the 
thing  in  which  the  offence  is  committed,  if  the  defendant  dies  his  executor 
shall  be  chargeable,  but  where  the  action  is  for  damages  only,  in  satisfac- 
tion of  the  injury  alone,  there  his  executors  shall  not  be  liable."  In  fur- 
ther commenting  upon  these  two  cases  Lord  Mansfield  said  :  ^  "  Here 
therefore  is  a  fundamental  distinction.  If  it  is  a  sort  of  injury  by  which 
the  offender  acquires  no  gain  to  himself  at  the  expense  of  the  sufferer,  as 
beating  or  imprisoning  a  man,  etc.,  there  the  person  injured  has  only  a 
reparation  for  the  delictum  in  damages  to  be  assessed  by  a  jury.  But 
where  besides  the  crime  property  is  acquired  which  benefits  the  testator, 
there  an  action  for  the  value  of  the  property  shall  survive  against  the  ex- 
ecutor. As  for  instance,  the  executor  shall  not  be  chargeable  for  the  injury 
done  by  his  testator  in  cutting  down  another  man's  trees,  but  for  the  bene- 
fit arising  to  his  testator  from  the  value  or  sale  of  the  trees  he  shall." 

Upwards  of  one  hundred  years  have  elapsed  since  this  judgment  in 
Hambly  v.  Trott  ^  was  delivered.  It  has  ever  since  been  regarded  as  an 
accurate  representation  of  the  state  of  the  law  as  affecting  executors  in  re- 
spect of  causes  of  action  and  forms  of  action  arising  out  of  the  acts  of  their 
testators.  The  circumstances  under  which  the  wrongful  act  with  which  we 
at  present  have  to  deal  was  committed  may  be  concisely  stated  as  follows  : 
In  the  year  1866  the  plaintiffs  were  the  owners  of  a  fiirm  in  Monmouth- 
shire, and  the  defendants,  Homfray,  Fothergill,  and  Forman,  who  carried 
on  business  under  the  style  of  the  Tredegar  Iron  Company,  had  for  some 
time  past  been  working  the  minerals  underlying  lands  adjoining  the  plain- 
tiffs' farm,  and  in  the  course  of  that  year  the  plaintiffs  discovered  that  the 
defendants  were  not  only  getting  minerals  from  under  the  farm  but  were 
using  roads  and  passages  made  by  them  through  the  plaintiffs'  minerals  for 
the  conveyance  of  minerals  gotten  by  the  defendants  from  their  own  mines. 
In  the  observations  I  am  about  to  make  it  is  important  to  bear  in  mind 
the  nature  of  the  wrongful  act  in  respect  of  which  the  plaintiff's  claim  re- 
dress ;  but  I  deem  it  unnecessary  to  further  refer  to  the  institution  and 
progress  of  the  suit,  as  those  have  been  sufficiently  detailed  in  the  judg- 
ment which  has  just  been  delivered.  It  has  hardly  been  disputed  on  the 
present  appeal  that  a  remedy  for  a  wrongful  act  can  be  pursued  against  the 
estate  of  a  deceased  person  by  whom  the  act  has  been  committed,  when 
property,  or  the  proceeds  of  property,  belonging  to  another  have  been  ap- 
1  Savile,  40.  2  j  Cowp.  376.  3  i  Cowp.  371. 


SECT.  II.]  PHILLIPS   V.    HOMFRAY.  61 

propriated  by  the  deceased  person,  in  other  words,  that  the  action  in  such 
cases,  though  arising  out  of  a  wrongful  act,  does  not  die  with  the  person  ; 
but  it  has  been  urged  that  tlie  principle  thus  enunciated  is  limited  to  cases 
in  which  property,  or  the  proceeds  of  property,  have  been  appropriated  by 
the  deceased  person,  and  that  it  does  not  apply  to  a  case  in  which  the  de- 
ceased person  has  derived  any  other  benefit  from  his  wrong-doing  than 
property  or  the  proceeds  of  property,  and  in  particular  that  it  does  not 
apply  to  a  case  in  which  the  benefit  derived  has  not  been  in  the  form  of 
an  actual  acquisition  of  property,  but  of  a  saving  of  expenditure  which 
must  otherwise  have  been  incurred  by  the  wrong-doer,  as  in  the  present 
case,  in  which,  for  the  purpose  of  the  present  argument,  it  must  be  assumed 
that  by  the  use  by  the  defendants,  for  the  carriage  of  their  minerals,  of  the 
roads  and  passages  under  the  plaintiffs'  farm,  there  was  a  saving  to  them 
of  an  expenditure  which  they  must  otherwise  have  incurred. 

Speaking  with  much  difiidence,  as  my  views  in  this  respect  differ  from 
those  of  my  colleagues,  I  feel  bound  to  say  that  I  cannot  appreciate  the 
reasons  upon  which  it  is  insisted  that  although  executors  are  bound  to 
account  for  any  accretions  to  the  property  of  their  testator  derived  directly 
from  his  wrongful  act,  they  are  not  liable  for  the  amount  or  value  of  any 
other  benefit  which  may  be  derived  by  his  estate  from  or  by  reason  of  such 
wrongful  act.  I  can  find  nothing  in  the  language  used  by  Lord  Mansfield 
that  can  support  this  view.  On  the  contrary,  when  classifying  the  actions 
which  survive  against  an  executor  by  reason  of  the  causes  of  action,  he 
includes  among  such  causes  of  action  "gain  or  acquisition  by  the  testator 
by  the  work  and  labor  or  property  of  another,"  and  he  in  no  respect  limits 
or  qualifies  the  nature  or  character  of  the  "gain  "  referred  to.  A  gain  or 
acquisition  to  the  wrong-doer  by  the  work  and  labor  of  another  does  not 
necessarily,  if  it  does  at  all,  imply  a  diminution  of  the  property  of  such 
other  person.  Whether  the  amount  of  the  wayleave  which  a  person  could 
reasonably  be  called  upon  to  pay  for  the  use  for  the  carriage  of  his  minerals 
over  the  roads  of  another,  would  be  a  fair  measure  of  the  gain  or  acquisi- 
tion to  the  property  of  tiie  person  who  has  so  used  them  without  paying 
any  wayleave,  is  a  question  which  it  is  not  necessary  to  decide.  I  enter- 
tain no  doubt  as  to  there  being  ample  means  of  ascertaining  the  amount  of 
gain  or  acquisition  to  the  property  of  a  person  so  using  the  roads  of  an- 
other. That  Lord  Mansfield  did  not  intend  to  limit  the  generality  of  the 
rule  enunciated  by  him  in  the  manner  suggested  is,  I  think,  clear  from  the 
following  observations  made  by  him  in  the  course  of  the  first  argument  in 
Hambly  v.  Trott :  ^  "  Suppose  the  testator  had  sold  the  sheep,  etc.,  in  ques- 
tion. In  that  case  an  action  for  money  had  and  received  would  lie.  Sup- 
pose the  testator  had  left  them  in  specie  to  the  executors,  the  conversion 
must  have  been  laid  against  the  executors.  Suppose  the  testator  had  con- 
sumed them  and  had  eaten  the  slieep,  what  action  would  have  lain  there  ] 

1  1  Cowp.  373. 


62  PHILLIPS   V.    HOMFRAY.  [CHAP.  I. 

Is  the  executor  to  get  off  altogether  1  I  shall  be  very  sorry  to  decide  that 
trover  will  not  lie  if  there  is  no  other  remedy  for  the  right."  It  appears 
to  me  clear  that  in  the  opinion  of  Lord  Mansfield  the  injured  owner  of 
the  sheep  was  equally  entitled  to  redress  against  the  estate  of  the  wrong- 
doer, whether  the  sheep  were  sold  by  him,  or  were  consumed  by  him,  or 
were  left  by  him  in  specie  at  his  death.  Now,  if  the  sheep  had  been  con- 
sumed by  the  testator,  the  only  accretion  to  his  property  derived  from  his 
so  doing  would  have  been  the  amount  of  the  saving  in  his  butcher's  bill, 
and  I  am  unable  to  appreciate  the  distinction  in  principle  between  adding 
to  his  property  by  savings  in  the  amount  of  his  butcher's  bills  and  by  sav- 
ings in  the  cost  of  carrying  his  minerals.  Upon  the  whole,  I  have  come  to 
the  conclusion  that  the  causes  of  action  which  were  the  foundation  of  the 
decree  made  in  the  present  suit,  and  to  which  I  deem  it  unnecessary  to 
more  particularly  refer,  were  such  as,  within  the  rule  in  Hambly  v.  Trott,^ 
to  entitle  the  plaintiffs  to  maintain  their  suit  against  Mrs.  Fothergill  as  the 
executrix  of  the  deceased  defendant,  R.  Fothergill,  in  respect  of  the  subject- 
matter  of  the  second  and  third  inquiries  directed  by  the  decree.  Whether 
the  proceedings  which  the  plaintiffs  have  adopted  for  the  purpose  of  en- 
forcing their  rights  are  in  form  such  as  to  entitle  Mrs.  Fothergill  to  suc- 
ceed in  her  appeal  is  a  question  the  consideration  of  which  I  wall  postpone 
until  after  I  have  referred  to  some  cases  in  equity  which  appear  to  me  to 
have  an  important  bearing  upon  it,  but  as  to  some  of  which  the  views 
formed  by  me  in  some  respects  differ  from  those  expressed  in  the  judgment 
of  my  colleagues. 

The  first  case  to  which  I  will  refer  is  that  of  Garth  v.  Cotton,'^  decided  by 
Lord  Hardwicke  in  the  year  1753.  This  was  before  the  decision  in  Ham- 
bly V.  Trott.  The  bill  was  for  an  account  of  all  sums  of  money  produced 
by  a  foil  of  timber  in  the  year  1714.  A  number  ot  objections  were  raised 
on  the  part  of  the  defendant,  the  seventh  of  which  was  stated  by  Lord 
Hardwicke*  in  the  following  terms:  "I  shall  mention  but  one  objection 
more,  and  that  arises  recently  from  the  present  state  of  the  cause,  as  it 
comes  before  the  court  upon  a  bill  of  revivor  against  the  representative  of 
Sir  John  Hind  Cotton,  the  original  defendant,  —  that  an  action  of  waste 
dies  with  the  person,  and  if  the  plaintiff  had  in  other  respects  been  in  a 
condition  to  maintain  waste  against  Sir  John  Hind  Cotton,  the  party  to  the 
articles,  it  had  been  gone  by  his  death  ;  that  the  law  is  the  same  as  to  the 
action  of  trover  :  pari  ratione  he  hath  lost  his  equitable  remedy  for  the 
waste."  In  meeting  this  objection  Lord  Hardwicke  ^  said  :  "  There  have 
been  several  determinations  in  this  court  where,  by  force  of  the  rule  actio 
personalis  moritiir  cum  persona,  the  remedy  at  law  hath  been  extinguished, 
yet  equity  hath  given  the  like  satisfaction  ; "  and  after  referring  to  various 
authorities,  he  proceeded  as  follows;^  "I  hold  that  in  all  cases  of  fraud  the 

1  1  Cowp.  371.  2  1  Dick.  183.  ■*  1  Cowp.  371. 

*  1  Dick.  'lU.  6  1  Dick.  215.  ^  i  Dick.  217. 


SECT.  II.]  PHILLIPS   V.   HOMFRAY.  63 

remedy  doth  not  die  with  the  person  ;  but  the  same  relief  shall  be  had 
against  an  executor  out  of  the  assets  of  his  testator  as  ought  to  have  been 
given  against  the  testator  himself.  For,  as  equity  disclaims  the  maxim 
that  a  personal  remedy  dies  with  the  person,  wherever  the  demand  is  proper 
for  that  jurisdiction,  this  court  will  follow  the  estate  of  the  party  liable  to 
that  demand,  and  out  of  that  decree  satisfaction." 

In  1801  the  case  of  Pulteney  v.  Warren  ^  came  before  Lord  Eldox.  The 
bill  prayed  an  account  of  mesne  profits  against  the  executors  of  one  Dr. 
AVarren.  Under  ordinary  circumstances  a  bill  in  equity  could  not  be  maio- 
tained  for  an  account  of  mesne  profits,  the  proper  jurisdiction  being  at  law-, 
and  the  substantial  question  was  whether  under  the  special  circumstances 
of  the  case  the  suit  could  be  maintained.  The  plaintiff  had  been  prevented 
from  recovering  in  ejectment  by  a  rule  of  the  Court  of  King's  Bench 
staying  proceedings  against  Dr.  Warren,  to  abide  the  result  of  proceedings 
in  the  House  of  Lords  in  another  case,  and  also  by  an  injunction  at  the 
instance  of  the  occupier,  who  ultimately  failed  both  at  law  and  in  equity. 
Lord  Eldon  held  that  these  circumstances  were  sufficient  to  justify  the 
plaintiff  in  commencing  proceedings  in  equity,  and  having  upheld  the  juris- 
diction, he  decreed  the  account  prayed  against  Dr.  Warren's  executors, 
though  it  was  strongly  urged  upon  him  that,  having  regard  to  the  case  of 
Hambly  v.  Trott,^  the  remedy  was  gone  by  reason  of  the  death  of  Dr.  War- 
ren. It  being  held  that  the  demand  of  the  plaintiff  was  one  which  could 
properly  be  entertained  in  equity,  the  common-law  maxim  that  the  personal 
remedy  died  with  the  person  was  disregarded. 

The  case  of  Marquis  of  Lansdowne  v.  Marchioness  Dowager  of  Lansdowne' 
came  before  the  Vice-Chancellor,  Sir  Thomas  Plumer,  in  1815.  The  bill 
was  against  the  representative  of  a  deceased  tenant  for  life,  and  prayed  an 
account  of  equitable  waste  committed  by  him  ;  on  the  part  of  the  defendant 
it  was  urged  that  if  the  tenant  for  life  had  committed  waste  and  died,  his 
representatives  would  not  have  been  answerable,  and  that  the  same  doc- 
trine applied  by  analogy  to  equitable  waste.  In  dealing  with  this  argu- 
ment Sir  Thomas  Plumer  quoted  in  some  detail  the  observations  of  Lord 
Mansfield  in  Hambly  v.  Trott,  and  added  :*  "This  I  take  to  be  a  just  ex- 
position of  the  qualifications  under  which  the  maxim  actio  2^€rsonalis  mori- 
tur  cum  persona  is  received  at  law ;  and,  if  equity  is  to  decide  in  analogy  to 
a  court  of  law,  the  question  in  the  present  case  will  bo  whether,  by  the 
equitable  waste  committed  by  the  late  Marqiiis,  he  derived  any  benefit,  or 
whether  it  was  a  naked  injury  by  which  his  estate  was  not  benefited]  It  is 
clear  it  was  benefited  ;  and  as  at  law  if  legal  waste  be  committed,  and  the 
party  dies,  an  action  for  money  had  and  received  lies  against  his  represen- 
tative; so  upon  the  same  principle,  in  cases  of  equitable  waste,  the  party 
mr.st  through  his  representatives  refund  in  respect  of  the  wrong  he  has 
done."     The  case  was  decided  by  Sir  Thomas  Plumeu  upon  the  broad  prin- 

1  6  Vcs.  73.  2  1  Cowi-.  371.  8  1  Mudd.  116.  *  1  Madd.  139. 


64  PHILLIPS   V.   HOMFKAY.  [CHAP.  L 

ciple  that  where  equitable  waste  had  been  committed  the  court  had  jui-is- 
diction  to  make  the  representatives  of  the  party  committing  such  waste 
accountable. 

Again,  in  Monypenny  v.  Bristow  ^  the  bill  was  filed  by  the  heir  of  a  tes- 
tator against  the  personal  representative  of  his  widow,  who,  with  the  ac- 
quiescence of  his  heir,  had  been  let  into  possession  of  certain  freehold 
houses,  under  an  erroneous  supposition  that  they  passed  by  the  will  alon<T 
with  other  property  in  which  a  life  interest  was  devised  to  her.  She  died 
before  the  error  was  discovered.  The  bill  prayed  delivery  of  the  title-deeds 
and  an  account  of  the  rents  received  by  the  widow  during  her  continuance 
in  possession.  It  was  urged  by  way  of  defence  that  these  rents,  being 
■wrongfully  received  by  the  widow,  could  have  been  recovered  in  her  lifetime 
only  by  an  action  of  trespass,  and  that  this  suit  being  founded  in  tort  died 
with  her,  but  this  contention  was  rejected  by  the  Master  of  the  Rolls,  Sir 
John  Leach,  who,  after  referring  to  the  judgment  in  Hambly  v.  Trott,^ 
decreed  the  account  prayed.  Tliere  was  an  appeal  to  the  Lord  Chancellor, 
Lord  Brougham,  who  dismissed  the  appeal  and  affirmed  the  decree  of  Sir 
John  Leach. 

The  last  case  in  equity  to  which  I  will  refer  is  that  of  Peek  v.  Gurney.^ 
In  that  case  it  was  sought  to  make  the  estate  of  Mr.  Gibbs  liable  for  a  mis- 
representation made  by  him  in  conjunction  with  other  directors  of  a  com- 
pany formed  under  the  Companies  Act.  His  executors  contended  that  the 
suit  was  in  effect  a  proceeding  to  recover  damages  for  a  wrong  done  by  Mr. 
Gibbs,  and  that  the  maxim  actio  j^^rsonalis  moritur  cum  2>ersona  applied. 
But  the  plaintiffs  failed  in  their  case  as  against  the  executors  of  Mr.  Gibbs 
on  the  express  ground  that  Mr.  Gibbs'  estate  had  derived  no  benefit  from 
the  misrepresentation  to  which  he  was  a  party. 

The  general  result  of  these  cases,  and  of  others  to  the  like  effect,  may  be 
thus  stated,  that  a  court  of  equity  will  give  effect  to  a  demand  against  the 
estate  of  a  deceased  person  in  respect  of  a  wrongful  act  done  by  him,  if  the 
wrongful  act  has  resulted  in  a  benefit  capable  of  being  measured  pecuniar- 
ily, and  if  the  demand  is  of  such  a  nature  as  can  be  properly  entertained 
bj'  the  court.  The  principles  thus  acted  upon  by  courts  of  equity  are  in 
accordance  with  the  conclusions  enunciated  by  Lox'd  Mansfield  with  refer- 
ence to  actions  at  common  law  which  survive  or  die  on  account  of  the  cause 
of  action ;  but  as  regards  those  actions  which  at  common  law  survive  or 
die  on  account  of  the  form  of  action,  courts  of  equitj'  will  not  permit  the 
justice  of  the  case  to  be  defeated  by  reason  of  the  technicalities  of  particular 
procedure.  That  the  demand  of  the  plaintiffs  in  this  suit  was  one  pioper 
to  be  made  in  a  court  of  equity  cannot  be  disputed ;  the  decree  is  conclu- 
sive on  this  point.  Upon  the  question  whether  the  wrongful  act  resulted 
in  a  benefit  to  the  estate  of  the  wrong-doer  I  think  the  proper  inquiry  is 
that  suggested  by  Sir  Thomas  Plumer,  "  Did  the  wrong-doer  derive  any 

1  2  Russ.  &  My.  117.  «  1  Cowp.  371.  s  L.  R.  6  H.  L.  377. 


SECT.  II.]  THE   PEOPLE  V.   GIBBS.  65 

benefit  from  the  wrong  done  by  liim,  or  was  it  a  naked  injury  by  which  his 
estate  was  in  no  way  lienefited?"  My  answer  to  that  inquiry,  as  applied 
to  the  circumstances  of  the  present  case,  is  that  the  estate  of  tiie  defendant 
R.  Fothergill,  was  benefited  by  the  wrongful  user  by  the  defendants  of  the 
roads  and  passjiges  under  the  plaintifl"'s  farm.  Indeed  the  decree,  as  varied 
by  Lord  Hatherley  and  as  explained  by  him,  appears  to  me  to  be  conclusive 
on  this  point  also.  If  the  views  which  I  have  expressed  are  correct,  it  would 
follow  that  had  no  suit  been  instituted  against  the  defendant  R.  Fother- 
gill, a  suit  to  the  like  effect  as  regards  the  subject-matter  of  the  second  and 
third  inquiries  might  have  been  commenced  and  prosecuted  after  his  death 
against  his  executrix.  Does  the  fact,  that  the  suit  was  commenced  against 
him  and  abated  upon  his  death,  make  any  difference  1  Can  it  be  said  that 
the  suit  survives  as  regards  part  of  the  relief  prayed,  but  has  died  as  re- 
gards the  subject-matter  of  the  second  and  third  inquiries  1  I  think  not. 
The  decision  of  Lord  Hardwicke  in  Garth  v.  Cotton  ^  was  upon  a  bill  of 
revivor  against  the  representative  of  a  defendant  to  the  original  bill,  and 
that  in  the  case  of  the  Marquis  of  Lansdowne  was  upon  a  demurrer  to  a 
supplemental  bill  filed  against  the  representative  of  the  Marquis,  who  was  a 
defendant  to  the  original  bill. 

For  these  reasons  the  appeal  of  Mrs.  Fothergill  ought,  in  my  opinion, 
to  be  dismissed.  I  think,  also,  that  the  appeal  of  the  plaintiffs  as  regards 
the  4th  inquiry  fails,  inasmuch  as  the  wrongful  acts  which  are  the  subject 
of  it,  though  occasioning  injury  to  the  plaintiffs,  did  not  result  in  any 
profit  to  the  wrong-doers. 


THE  PEOPLE   V.   GIBBS  and  Another,   Executors  of  GIBBS, 
Late  Sheriff  of  Washington. 

In  the  Supreme  Court  of  Judicature  of  New  York,  May,  1832. 
[Reported  in  9  Wendell,  29.] 

This  action,  tried  at  the  Washington  circuit  in  November,  1830,  before 
the  Hon.  Esek  Cowen,  one  of  the  circuit  judges,  was  brought  to  recover 
the  balance  of  a  sum  of  money  directed  to  be  levied  on  a  warrant  issued 
by  the  treasurer  of  the  county  of  Washington,  commanding  the  sheriff  of 
that  county  to  levy  of  the  goods,  <tc.  of  one  J.  J.  Sherwood,  $1743.05, 
being  the  balance  of  a  certain  tax,  for  the  collection  of  which  a  tax  roll  and 
warrant  in  due  form  had  been  delivered  to  Sherwood  as  collector  of  the 
town  of  Salem,  and  which  sum  remained  due  and  unaccounted  for  by  him. 
The  warrant  against  the  collector  was  delivered  to  a  deputy  of  the  shoriflT, 
rtid  ^343.39  remaining  unaccounted  for  by  the  sheriff,  and  the  warrant  not 
having   been  returned   to  the  treasurer,   this  action   was   brought.     The 

1  1  Dick.  215. 


66  THE    PEOPLE   V.    GIBBS.  [CIIAP.  I. 

declaration  was  in  assumpsit,  containing  the  common  money  counts  and  an 
account  stated ;  the  defendants  pleaded  the  general  issue.  On  the  above 
facts  appearing,  the  counsel  for  the  defendants  insisted  that  the  action  did 
not  lie  against  the  executors  of  the  sheriff,  it  being  in  its  nature  ex  delicto 
and  fallin*'  within  the  rule  actio  personalis  moritur  cum  persona.  Tlie  pre- 
sidintr  judge  decided  that  the  action  could  not  be  sustained,  unless  it  was 
proved  that  the  balance  claimed  had  been  actually  received  by  the  sheriff 
in  his  lifetime,  or  by  his  deputy  ;  and  no  such  proof  being  given,  the  judge 
instructed  the  jury  to  find  a  verdict  for  the  defendants,  who  found  accord- 
ingly. The  counsel  for  the  people  excepted  to  the  decision  and  charge  of 
the  judge,  and  moved  for  a  new  trial. 

Greene  C.  Broiison,  Attorney-General,  for  the  people. 

J.  Willard  and  D.  Russell,  for  defendants. 

By  the  Court,  Savage,  Ch.  J.  By  the  laws  relating  to  taxes,  every 
collector  is  required  to  settle  his  account  with  the  county  treasurer  within 
one  week  after  the  time  mentioned  in  his  warrant.  If  the  collector  refuses 
or  neglects  to  pay  to  the  county  treasurer  the  amount  of  taxes  contained 
in  the  assessment  roll,  or  to  account  for  the  same  in  the  manner  prescribed 
by  the  statute,  the  county  treasurer  is  required  to  issue  his  warrant  to  the 
sheriff  of  the  county,  commanding  liim  to  cause  the  amount  specified  to  be 
levied  of  the  goods  and  chattels,  lands  and  tenements  of  the  collector.  If 
the  sheriff  neglects  to  return  such  warrant  or  pay  the  money  levied  thereon 
within  the  time  limited,  he  is  declared  liable  to  pay  the  amount  of  the 
warrant  to  the  people  of  the  State,  to  be  recovered  in  an  action  for  so  much 
money  received  to  their  use.  The  county  treasurer  certifies  the  default  of 
the  sheriff  to  the  comptroller,  and  he  gives  notice  thereof  to  the  Attorney- 
General,  whose  duty  it  is  to  prosecute  the  sheriff,  i  This  action  is  brought 
under  this  statute. 

It  is  not  denied  that  the  action  would  lie  against  the  sheriff  himself 
upon  the  facts  proven  in  this  case ;  but  it  is  contended  that  the  action, 
though  in  form  ex  contractu,  is  one  actually  in  tort ;  that  it  is  for  a  nor.feas- 
ance  in  his  office,  and  does  not  survive  against  his  representatives.  The 
action  against  the  sheriff  himself  would  lie,  not  because  money  had  been 
received  by  him,  but  because  he  had  been  guilty  of  official  negligence,  for 
which  the  legislature  have  said  he  might  be  made  liable  in  this  form  of 
action. 

There  seems  to  have  been  some  difficulty  in  the  application  of  the  prin- 
ciple actio  personalis  moritur  cum  persona.  To  a  certain  extent  there  is  no 
difficulty.  Actions  upon  contracts  relating  to  property  survive  ;  executors 
and  administrators  are  the  representatives  of  the  property,  that  is,  personal 
property  of  the  deceased,  —  they  represent  the  goods  and  chattels,  rights 
and  credits  of  the  deceased.  Actions  for  wrongs  for  personal  injuries  do 
not  survive,  for  executors  and  administrators  do  not  represent  the  wrongs 

1  2  R.  L.  513,  14. 


SECT.  II.]  THE   PEOPLE   V.   GIBBS.  67 

of  the  deceased,  except  as  far  as  their  personal  property  is  affected.  In  all 
the  recent  adjudications  and  elementary  works,  the  case  of  Haiubly  v.  Trott  ^ 
is  referred  to  as  containing  the  correct  doctrine  on  this  point.  That  was 
an  action  of  trover  against  the  executor,  or  rather  administrator,  with  the 
will  annexed,  for  a  conversion  by  the  testator.  Lord  Mansfield,  in  giving 
the  opinion  of  the  court,  considers  two  classes  of  cases  :  1.  Actions  which 
either  survive  or  die  on  account  of  the  cause  of  action ;  2.  Those  which 
survive  or  die  on  account  of  the  form  of  action.  As  to  the  first  class, 
which  alone  it  is  important  to  consider  here,  the  rule  laid  down  by  Lord 
Mansfield  is,  that  the  action  survives  when  the  cause  of  action  is  money 
due  on  a  contract,  express  or  implied,  or  gain  by  the  work  or  property  of 
another  ;  but  where  the  cause  of  action  is  tort,  there  the  action  dies.  He 
specifies  battery,  false  imprisonment,  trespass,  words,  nuisance,  obstructing 
lights,  diverting  a  water-course,  escape  against  the  sheriff,  and  cases  of  the 
like  kind.  A  general  rule  is  subsequently  laid  down  which  has  ever  since 
been  considered  correct:  "If,"  says  he,  "it  is  a  sort  of  injury  by  which 
the  offender  acquires  no  gain  to  himself  at  the  expense  of  the  sufferer,  as 
beating  or  imprisoning  a  man,  then  the  person  injured  has  only  a  reparation 
for  the  delictuvi  in  damages  to  be  assessed  by  a  jury;  but  where,  besides 
the  crime,  property  is  acquired,  which  benefits  the  testator,  then  an  action 
for  the  value  of  the  property  shall  survive  against  the  executor;  as  for 
instance  the  executor  shall  not  be  chargeable  for  the  injury  done  by  his 
testator  in  cutting  down  another  man's  trees,  but  for  the  benefit  arising  to 
his  testator  for  the  value  or  the  sale  of  the  trees,  he  shall."  For  the  offence 
itself,  the  executor  is  not  responsible ;  but  so  for  as  the  act  of  the  offender 
is  beneficial  to  his  estate,  his  assets  ought  to  be  answerable.  This  is  the 
common-law  rule,  and  under  it  an  action  of  trover  would  not  lie  against 
the  executor  for  property  converted  by  the  testator.^  But  by  our  stat- 
ute, 1  R.  L.  311,  312,  the  action  of  trespass  is  given  by  and  against 
executors  and  administrators  for  property  taken  and  converted  by  the 
testator  or  intestate  in  his  lifetime.  It  was  decided  in  this  court  in 
Martin  v.  Dradley,'  that  debt  will  not  lie  against  the  administrator  of  a 
sheriff"  for  an  escape  in  the  lifetime  of  the  intestate ;  and  in  Franklin  v. 
Low  &  Swartwout,*  it  was  held  that  an  actiun  would  not  lie  against  the 
representatives  of  a  deceased  postmaster  fur  the  misconduct  of  his  clerk. 
In  this  case,  Mr.  Justice  SrENCER  cites  with  approbation  the  doctrine  of 
Lord  Mansfield  in  Ilambly  v.  Trott,  and  also  liailey  v.  Hirtles,^  referred  to 
and  relied  on  in  Ilambly  v.  Trott,  where  it  was  held  trover  would  nut  lie. 
In  McEvcrs  v.  Pitkin,  late  sheriff,'  it  was  decided  that  the  administrator 
of  a  deceased  sheriff  was  not  lial)le  in  an  action  for  the  default  of  one  of 
the  shfiriff^s  deputies  in  not  executing  and  retuniing  a  writ  of  execution,  ou 
the  ground  that  the  action  was  for  a  tort  or  misfeasance  of  the  sheriff  by 

»  Towp.  371.  2  T„ii.  f;x.  4(50,  2.  »  1  Cai.  124. 

*  1  J.jlins.  402.  6  T.  liiiytii.  71.  «  1  lioot,  210. 


68  THE  PEOPLE   V.   GIBBS.  [CHAP.  I. 

his  deputy,  which  was  personal  and  died  with  the  person.  In  Cravath  v. 
Pljmpton,*.  it  was  held  that  no  action  lay  against  the  executes*  of  a  deputy 
sheriff  for  a  nonfeasance  of  the  deputy  in  neglecting  to  levy  an  execution 
fur  the  plaintiff  on  the  body  of  his  debtor.  In  all  these  cases  the  courts 
refer  to,  and  rely  upon  the  case  of  Hambly  v.  Trott.  In  Cravath  v.  Plymp- 
ton,  Putnam,  Justice,  states  the  principle  to  be,  that  where  the  deceased 
by  a  tortious  act  acquired  the  property  of  the  plaintiff,  as  by  cutting  his 
trees  and  converting  them  to  his  own  use,  although  trover  does  not  lie, 
yet  the  plaintiff  may  recover  the  value  of  his  trees  in  some  other  form  of 
action  ;  but  where,  by  the  act  complained  of,  the  deceased  acquired  no 
gain,  although  the  plaintiff  may  have  suffered  great  loss,  then  the  rule 
applies,  actio  personalis  morihir  cum  persona.  The  cases  of  Cutler  a  Hay  v. 
Erown's  Ex'rs,^  and  Ex'rs  of  Crane  v.  Crane,'  do  not  establish  a  different 
rule,  nor  are  they  at  all  at  variance  with  the  other  cases  referred  to.  The 
first  states  that  an  action  for  enticing  away  the  plaintiff's  slave  will  lie 
against  executors  for  the  same  reason  that  trover  will ;  that  is  the  whole 
case.  If  it  is  intended  in  a  case  where  the  tcstator';3  estate  was  benefited, 
as  I  presume  it  is,  then  there  is  no  objection  to  it ;  if  anything  else  is 
meant,  it  is  incorrect.  The  other  case  was  assumpsit  against  executors  for 
wood  cut  and  sold  by  the  testator ;  it  is  the  precise  case  supposed  by 
Lord  Mansfield  in  Hambly  v.  Trott. 

Were  it  not  fur  the  statute  allowing  an  action  for  money  had  and  received 
to  be  brought  against  the  sheriff  in  a  case  like  the  present,  the  action  must 
have  been  an  action  on  the  case  against  the  sheriff  for  the  default  of  his 
deputy  in  neglecting  to  return  an  execution  (for  the  warrant  in  this  case 
was  in  the  nature  of  an  execution,)  and  then  it  would  be  like  the  case  of 
McEvers  v.  Pitkin.  It  is  analogous  in  principle  with  the  action  of  debt  for 
an  escape ;  there,  as  here,  the  action  is  in  form  ex  contractu,  but  in  substance 
ex  delicto  ;  yet  the  form  of  the  action  does  not  vary  the  cause  of  action,  and 
when  that  is  ex  delicto,  and  not  beneficial  to  the  estate,  no  action  lies  against 
the  representative  of  the  estate. 

I  am  satisfied,  therefore,  that  the  learned  circuit  judge  was  correct,  and 
a  new  trial  should  be  denied. 

1  13  Mass.  454.  »  2  Hayw.  182.  8  4  Hals.  173. 


CHAPTER    II. 

FAILURE    OF    CONSIDERATION. 


SECTION    L 

MISTAKE. 


(a)  Mistake  may  he  as  to  Law  or  Fact. 


HEWER  V.   BARTHOLOMEW. 
Ix  THE  King's  Bench,  Trinity  Term,  1598. 

\Reported  in  Croke,  Elizabeth,  614.] 

AccoMPT,  supposing  that  he  received  £100  by  the  hands  of  John  Coven- 
try. The  defendant  pleaded  ne  unques  son  receiver  by  the  hands  of  John 
Coventry  to  render  accompt,  etc. ;  and  thereupon  they  were  at  issue.  The 
jury  found,  that  Bartholomew  paid  that  £100  to  Hewer  the  plaintiff,  in 
redemption  of  a  mortgage ;  and  he  commanded  his  servant  to  put  it  in  his 
closet ;  who  did  so.  Afterwards  Bartholomew  demanded  of  the  plaintiff 
certain  evidences  and  bonds,  which  he  refused  to  deliver.  The  defendant 
then  required  that  he  might  have  his  money  again,  which  he  then  had 
paid.  Tlie  plaintiff  thereupon  commanded  his  servant  John  Coventry, 
that  he  should  fetch  back  the  said  £100  ad  redeliberandum  to  the  foresaid 
J.  Bartholomew  the  said  £100  by  him  paid;  and  that  the  said  John  Coven- 
try did  fetch  again  the  same  money,  and  poured  it  forth  \ipon  the  table 
eidem  J.  Bartholomew  ea  intentione,  ut  idem  J.  Bartholomew  suas  centum 
libra*  proedict.  quas  idem  J.  Bartholomew  to  the  said  plaintiff  had  paid 
rectperet  in  prcesentia  of  the  plaintiff;  and  the  plaintiff  then  and  there  did 
will  the  defendant  ad  recipiendum  the  foresaid  £100  per  ipsum  defendentem 
prcefato  queretUi,  nt  preeferttir,  solid.  quaS  £100  idem  defendens  adtunc  et 
ibidem,  recepit,  et  asportavit.     Et  si  su2>er  tota  viateria,  etc. 

And  all  the  court  resolved,  that  this  payment  was  a  good  discharge  of 
the  mortgage ;  and  although  he  afterwards  required  it  again,  as  his  own 
money,  yet  it  shall  not  avoid  that  which  was  absolutely  paid  ;  but  the 
mortg.ige  remains  absolutely  discharged  ;  and  the  monies  were  the  i)laintiff'8 
own  monies.  And  although  he  delivered  them  to  the  defendant  as  his  own, 
not  knowing  the  law  therein,  supposing  it  to  be  no  payment,  yet  in  regard 
he  did  not  give  it  otherwise,  nor  upon  other  consideration,  the  defendant 
received  thom  as  the  plaintiff's  money,  and  is  accoimtablo  for  thorn. 


70  BONNEL   V.   FOUKE.  [CHAP.  II. 

Secondly,  Popham  and  Gawdy  held,  that  this  was  not  any  receipt  by 
the  liands  of  J.  Coventry,  but  by  the  hands  of  the  plaintiff  himself;  for 
when  he  willed  the  defendant  to  receive  it,  it  was  his  own  delivery ;  and 
when  he  commanded  his  servant  to  fetch  it  ad  deliberandum  to  the  defend- 
ant, and  he  brought  it  down  and  poured  it  forth  ea  intentione  that  the 
defendant  should  receive  it,  that  is  not  any  authority  to  the  servant  to 
deliver  it,  nor  did  he  by  that  act  deliver  it.  But  Popham  said,  if  he  had 
commanded  his  servant  to  bring  the  said  money,  and  deliver  it  to  the 
defendant,  and  he  had  done  it  in  the  presence  of  his  master,  and  the  mas- 
ter had  required  the  other  to  receive  it,  that  peradventure  might  have 
been  a  receipt  by  the  hands  of  the  servant. 

Fenner  held  the  contrary  in  this  point,  for  he  conceived  it  to  be  a  deliv- 
ery by  the  servant,  because  he  fetched  it  down,  and  poured  it  forth  to  the 
other  to  receive  it.     And  Clench  doubted.     Et  adjournatur. 

But  afterwards  the  plaintiff  discontinued  his  suit,  and  brought  a  new 
action,  supposing  the  receipt  by  his  own  hands. 


JACOB    BONNEL  v.   JOHN  FOUKE,  Alderman   of   London. 

In  the  Upper  Bench,  Michaelmas  Term,  1657. 

[Reported  in  2  Siderfin,  4.] 

The  plaintiff  being  one  of  the  colemeeters  of  London,  for  which  he  was  to 
pay  £80  per  annum,  the  special  matter  was  found  to  be  that  by  divers  char- 
ters the  Kings  of  England  have  granted  and  confirmed  to  the  Mayor  and 
Aldermen  of  London,  the  measuring  of  cloths,  as  well  woollen  as  linen,  silks, 
etc.,  and  the  weighing  and  measuring  of  fruit,  fish,  coals,  etc.,  both  in  the 
port  of  London  and  on  the  Thames  from  Stanesbridge  to  London  bridge, 
and  thence  to  Medway  near  the  sea,  as  also  upon  the  river  Medway, 
of  all  such  goods  landed  upon  the  banks  within  the  said  space  before 
limited ;  and  it  was  found  that  in  ancient  times  there  were  but  four  cole- 
meeters, and  afterwards  six  were  appointed,  and  later  eight.  And  in  the 
third  year  of  King  James  it  was  enacted  by  the  Common  Council  of 
London  (which  has  as  much  power  within  the  walls  of  London  as  an  act 
of  Parliament  without)  that  there  should  be  ten  colemeeters,  eight  of  whom 
should  pay  their  rent  to  the  Lord  Mayor  for  the  time  being,  for  the  main- 
tenance of  his  honorable  house,  while  the  other  two  should  pay  their  rent 
to  the  Chamberlain  of  London.  The  plaintiff  was  one  of  these  two.  About 
the  year  1652  (as  I  remember),  when  the  defendant  was  Mayor,  he  de- 
manded of  the  plaintiff  the  said  rent,  who  paid  it  quarterly  and  holds 
several  receipts  of  this  tenor  :  Received  of  J.  B.,  one  of  the  colemeeters  of 
the  city  of  Loudon,  the  sum  of  £20  for  his  rent,  by  me,  J.  F.,  Lord  Mayor, 


SECT.  I.]  TURNER   V.   TURNER.  71 

etc.  Afterwards  the  rent  was  demanded  of  the  said  defendant  [plaintiff]] 
by  the  Chamberlain  of  the  city,  and  he  paid  the  said  rent  to  the  Chamber- 
lain, and  therefore  brought  assumpsit,  namely,  indebitatus  assumpsit,  against 
the  defendant  Fouke.     It  was  adjudged  that  the  action  well  lies. 

As  if  one  comes  to  me  and  says :  Pay  me  my  rent,  I  am  your  landlord  ; 
and  I  answer :  Give  me  your  receipt  and  you  shall  have  it,  and  so  I  pay, 
and  afterwards  another  who  has  right  comes  and  demands  the  rent,  and  I 
pay  him,  I  may  have  indebitatus  assti7npsit  against  him  who  gave  me  the 
first  receipt. 

And  if  I  pay  money  in  satisfaction  of  a  duty,  and  he  to  whom  it  is  paid 
has  no  title  to  receive  it,  and  so  the  duty  is  not  satisfied,  he  to  whom  the 
money  was  paid  is  thereby  indebted  to  me,  and  therefore  I  may  maintain 
an  action  against  him  as  well  as  against  one  who  has  no  title  to  demand 
rent. 


TUKNER  V.   TURNER. 

In  Chancery,  1680. 

[Reported  in  2  Reports  in  Chancery,  Sd  Ed.,  81.] 

That  the  plaintiff's  father  lent  to  Ayloff  £700,  and  at  another  time 
£200,  for  which  Ayloff  mortgaged  lands  to  the  plaintiff's  father  and  his 
heirs,  with  proviso,  that  on  payment  of  £G00  to  the  said  plaintiff's  father 
or  heirs,  then  the  premises  to  be  reconveyed  to  AylofF;  that  the  plaintiff 
is  executor  to  his  father  and  brothers,  and  so  claims  the  mortgages  as 
vesting  in  the  executors  of  his  father,  and  not  in  his  heirs. 

The  defendant,  being  the  son  and  heir  of  the  plaintiff's  eldest  brother 
deceased,  and  grandson  and  heir  to  the  plaintiff's  father,  insists  that  the 
plaintiff  and  defendant,  and  others  who  claimed  several  shares  and  parts  of 
the  plaintiff's  father's  personal  estate,  agreed  to  a  division  thereof  amongst 
themselves ;  and  a  division  was  made,  and  releases  given  of  each  one's  de- 
mands, in  law  or  equity  to  the  said  estate,  and  the  plaintiff  in  particular 
released,  and  the  said  Ayloff's  mortgage,  with  the  money  due  thereon  with 
other  things,  was  set  out  and  allotted  to  the  defendant  by  consent  of  all  the 
parties,  and  received  by  the  defendant  in  part  of  his  share,  and  the  plain- 
tiff accounted  to  the  defendant  for  the  profits  of  the  said  Ayloff's  mortgaged 
premises  received  by  him,  and  afterwards  in  KKU  the  defendant  had  a 
decree  for  the  mortgage  money  against  Ayloff's  executor,  and  received  the 
same,  to  which  proceedings  the  plaintiff  was  privy,  and  the  defendant  says 
it  is  unreasonable  that  the  plaintiff  should  now  make  a  demand  to  the  said 
mortgatre,  to  unsettle  matters  so  settled  l)y  his  own  consent;  but  tlic  plain- 
tiff insists  he  looked  on  the  premises  at  that  time  to  come  to  the  defendant 


72  LANSDOWNE   V.   LANSDOWNE.  [CHAP.  II. 

aa  heir,  and  knew  not  his  own  title  thereto,  and  the  shares  set  out  came 
but  to  £250  apiece,  and  Ayloff's  mortgage  was  worth  £8000. 

This  Court  is  of  opinion  that  the  plaintiff  ought  to  be  relieved,  and  had 
an  undoubted  right  to  the  said  mortgaged  premises,  and  decreed  the  de- 
fendant to  repay  all  the  money  received  by  him  thereon  to  the  plaintiflf. 


LANSDOWNE   v.   LANSDOWNE. 
In  Chancery,  before  Lord  King,  C,  June  15,  1730. 

[Reported  In  2  Jacob  Sr  Walker,  205.'] 

Mary  Lansdowne,  having  four  sons,  Richard,  John,  Thomas,  and  Wil- 
liam, by  settlement  limited  to  each  of  them  in  fee  a  part  of  her  real  estates, 
after  her  death.  The  plaintiff  was  the  son  and  heir  of  Richard.  John  died 
without  issue,  having  devised  his  share  to  Thomas,  and  Thomas  afterwards 
died  without  issue  and  intestate.  On  this  a  question  arose  between  the 
plaintiff  and  William  as  to  the  right  of  succession  to  Thomas ;  after  con- 
sulting with  one  Hughes,  they  agreed  to  divide  the  lands  between  them, 
and  in  pursuance  of  the  agreement  they  executed  first  a  bond,  and  after- 
wards conveyances  of  the  shares  fixed  on  for  each. 

The  plaintiff  sought  to  be  relieved  against  these  instruments,  alleging  by 
his  bill  that  he  had  been  surprised  and  imposed  upon  by  Hughes  and 
William  Lansdowne.  Hughes  was  made  a  defendant  to  the  bill ;  the  other 
defendant  was  the  infant  son  and  heir  of  William,  who  had  died  before  the 
commencement  of  the  suit.  Hughes,  in  his  answer,  admitted  that  he  had 
given  his  opinion  that  William  was  the  heir  at  law  of  Thomas,  "  being,"  aa 
he  said,  "  misled  herein  by  a  book  which  this  defendant  then  had  with  him, 
called  The  Clerk's  Remembrancer."  He  recommended  them  to  take  fur- 
ther advice,  which  they  at  first  intended  to  do,  but  the  plaintiff  afterwards 
voluntarily  told  him,  "  That  if  his  cousin  William  would,  he  would  agree  to 
share  the  land  between  them,  let  it  be  whose  right  it  would,  and  thereby 
prevent  all  disputes  and  lawsuits." 

The  decree  declared,  that  it  appeared  that  the  bond  and  indentures  were 
obtained  by  a  mistake  and  misrepresentation  of  the  law,  and  ordered  them 
to  be  given  up  to  be  cancelled.  The  bill  was  dismissed,  as  against  Hughes, 
without  costs.''' 

1  Reported  also  in  Moseley,  364.  —  Ed. 

2  In  Moseley,  364,  the  Lord  Chancellor  is  reported  as  saying  in  this  case:  — 

"That  maxim  of  law,  ignorantia  juris  non  excusat,  was  in  regard  to  the  public,  that 
ignorance  cannot  be  pleaded  in  excuse  of  crimes,  but  did  not  hold  in  civil  cases."  —  Ed. 


SECT.  I.]  FAKMER  V.  AEUNDEL.  73 

BINGHAM    V.    BINGHAM. 
Before  William  Fortescue,  M.ll.,  October  27,  1748, 

[Eeporlcd  in  1  Fescij,  Scjiior,  126.] 

As  agreement  was  made  for  the  sale  of  an  estate  to  the  plaintifiF  by  de- 
fendant, who  had  brought  an  ejectment  in  support  of  a  title  thereto  under 
a  will.^ 

The  bill  was  to  have  the  purchase-money  refunded,  as  it  appeared  to 
have  been  the  plaintiff's  estate. 

It  was  insisted,  that  it  was  the  plaintiff's  own  fault,  to  whom  the  title 
was  produced,  and  who  had  time  to  consider  it. 

Decreed  for  the  plaintiff  with  costs,  and  interest  for  the  money  from  the 
time  of  bringing  the  bill ;  for  though  no  fraud  appeared,  and  the  defendant 
apprehended  he  had  a  right,  yet  there  was  a  plain  mistake,  such  as  the 
court  was  warranted  to  relieve  against,  and  not  to  suffer  the  defendant  to 
run  away  with  the  money  in  consideration  of  the  sale  of  an  estate  to  which 
he  had  no  right. 


FARMER  V.   ARUNDEL. 
In  the  Common  Pleas,  Trinity  Term,  1772. 

[Reported  in  2  William  Blackstone,  824.] 

Assumpsit  for  money  had  and  received  to  the  plaintiff's  use,  and  for 
money  lent  and  advanced,  and  for  money  laid  out  and  expended  by  tho 
plaintiff  for  the  defendant.  On  non  assumpsit  pleaded  and  issue  thereon, 
the  case,  upon  trial  at  last  Worcester  Assizes  before  Mr.  Justice  Narks, 
appeared  to  be,  — "  That  the  plaintiff  was  overseer  of  Grimlcy,  in  Co. 

•  Tlie  mateiial  facts  were  as  follow.s  :  One  John  Bingham  (inter  alia)  devLsed  an 
estate  tail  in  certain  hinds  to  Daniel  his  eldest  son  ami  heir,  limiting  tho  revei-sion  in 
fee  to  his  own  lieirs.  Daniel  left  no  i.ssue,  hut  devised  this  estate  to  the  plaintiff  in  fee. 
The  bill  stated  that  tlie  latter,  being  ignorant  of  the  law,  and  persuaded  by  the  defend- 
ant, and  his  scrivener  and  conveyancer,  tliat  Daniel  had  no  power  to  make  such  devise, 
and  being  ai.so  subjected  to  an  action  of  ejectment,  purcha-sed  the  estate  of  the  defendant 
for  £30  ;  and  that  it  was  conveyed  to  him  by  lea.so  and  release.  The  lull  was  to  have 
this  money  repaid  with  interest.  Tiie  defendant  by  his  answer  first  of  all  insisted,  tliat 
Daniel  had  no  jK)wcr  to  make  such  devi.so  ;  but  if  he  had,  he  urged  that  tho  plaintiH 
should  have  "  lieen  better  ndvi.sod  lx;foro  ho  j)arted  with  his  money,  for  that  all  pur- 
chases were  to  be  at  the  peril  of  the  purcha.ser."  Tho  decree  was  for  the  money,  with 
interest  and  costs.     Bell's  Supplement  to  Vescy,  79.  —  Ed. 


74  FARMER   V.    ARUNDEL.  [CHAP.  II. 

Worcester,  and  the  defendant  of  St.  Martin's,  in  Worcester  citj.  That,  \n 
1724,  Ricliard  Lamb  was  certificated  by  the  parish  of  Grimley  to  St. 
Peter's,  in  Worcester,  or  any  other  parish  in  the  said  city.  On  the  14th 
of  March,  1771,  a  common  order  of  removal  was  made  by  two  justices  to 
remove  Lamb  and  his  family  from  St.  Martin's  to  Grimley.  The  defend- 
ant, meeting  the  plaintiff  in  the  city  of  Worcester,  produced  the  pauper 
and  his  family  to  him,  and  acquainted  him  with  the  order.  Whereupon 
the  plaintiff  received  the  paupei'S ;  and  the  defendant  then  demanded  pay- 
ment of  a  bill  of  8/.  9s.  lOd.  for  money  expended  by  St.  Martin's  in  main- 
taining the  pauper  and  his  family  for  the  last  four  years,  which  the  plaintiff 
accordingly  paid.  That  the  pauper  still  continuing  in  St.  Martin's,  another 
order  of  two  justices  was  made  on  the  11th  of  September,  1771,  for  his  re- 
moval, but  in  neither  of  the  orders  is  any  mention  made  of  the  certificate. 
To  this  order  Grimley  appealed,  and  the  Sessions  confirmed  the  same,  but 
made  no  order  for  costs."  And  this  action  is  now  brought  to  recover  back 
this  sum  of  8/.  9s.  10(/.,  which  the  plaintiff  says  he  paid  in  his  own  wrong. 

Walker,  for  the  plaintiff,  argued  that  the  defendant,  having  no  right  to 
demand,  had  therefore  no  right  to  retain  this  money  ;  that  the  pauper  was 
not  certificated  to  St.  Martin's,  but  St.  Peter's ;  and  that,  under  stat.  8  & 
9  W.  3,  c.  30,  the  certificate  must  be  to  some  particular  place ;  that  stat. 
3,  Geo.  2,  c.  29,  [s.  9,]  provides  for  reimbursing  the  expenses  of  certificated 
persons,  to  be  liquidated  by  a  justice  of  peace.  This  certificate  is  three 
years  prior  to  that  act,  and  that  act  recites  that  the  expense  could  not  then 
be  recovered  by  law.  The  remedy  pointed  out  by  that  act  has  not  been 
pursued,  even  granting  the  certificate  to  extend  to  the  parish  of  St. 
Martin's. 

Burland,  for  the  defendant,  insisted,  that  the  direction  was  surplusage  ; 
for  certificates  need  not  be  directed  at  all;^  but  when  once  delivered,  it  is 
satisfied,  and  cannot  be  used  again  :  High  and  Low  Bishopside ;  ^  that  stat. 
3  Geo.  2  extends  to  all  removals  subsequent  to  that  act  under  certificates, 
whenever  given,  and  that  the  justice  is  only  to  liquidate  in  case  of  a  dis- 
pute, not  where  the  sum  is  admitted,  as  in  the  present  case ;  that  there  are 
many  cases  where  a  man  has  no  right  to  demand  money,  which  yet  (if 
voluntarily  paid  him)  he  may  retain,  —  as  debts  of  honor  or  gratitude,  and 
bounties. 

De  Grey,  C.  J.  —  When  money  is  paid  by  one  man  to  another  on  a  mis- 
take either  of  fact  or  of  law,  or  by  deceit,  this  action  will  certainly  lie. 
But  the  proposition  is  not  universal,  that  whenever  a  man  pays  money 
which  he  is  not  bound  to  pay  he  may  by  this  action  recover  it  back. 
Money  due  in  point  of  honor  or  conscience,  though  a  man  is  not  compella- 
ble to  pay  it,  yet  if  paid,  shall  not  be  recovered  back,  —  as  a  bona  fide  debt, 
which  is  barred  by  the  statute  of  limitations.     Put  the  form  of  the  certifi- 

1  St.  Nicholas  Harwich  and  Wolferstan.  Str.  1163. 
»  T.  28  Geo.  2,  Burr.  Settlem.  Cases,  381. 


SECT.  I.]  BIZE  V.   DICKASON.  75 

cate  out  of  the  case,  it  is  however  evidence,  at  all  events,  that  the  parish  of 
Grimley  have  acknowledged  the  pauper  to  be  their  parishioner.  And  it  is 
allowed,  that  he  has  been  maintained  four  years  by  the  parish  of  St.  Mar- 
tin's. Admitting,  therefore,  that  this  money  could  not  have  been  demanded 
by  the  defendant  (which  it  is  not  now  necessary  to  decide),  yet  I  am  of 
opinion  that  it  is  an  honest  debt,  and  that  the  plaintiff,  having  once  paid 
it,  shall  not,  by  tliis  action,  which  is  considered  as  an  equitable  action, 
recover  it  back  again. 

Gould,  Blackstone,  Nares,  Js.,  of  the  same  opinion. 

Judgment  for  the  defendant. 


BIZE  V.  LICKASOX,  and  Another,  Assignees  of  BARTEXSHLAG. 

In  the  King's  Bench,  June  23,  17SG. 

[Reported  in  1  Term  Reports,  285.] 

This  was  an  action  for  money  had  and  received  by  the  defendants,  as 
assignees  of  the  bankrupt,  for  the  plaintiff's  use.     Plea,  the  general  issue. 

The  cause  came  on  to  be  tried  at  the  sittings  after  Easter  Term,  1786, 
at  Guildhall,  Loudon,  before  Buller,  Justice,  when  the  jury  found  a  verdict 
for  the  plaintiff;  damages  661/  9s.  lOcZ.  aud  costs  40s.,  subject  to  the  opin- 
ion of  the  Court  on  the  following  case  :  — 

That  the  bankrupt  John  Rodolph  Bartenshlag,  being  an  underwriter, 
subscribed  policies  filled  up  with  the  plaintiff's  name  for  his  foreign  corres- 
pondents, who  were  unknown  to  the  bankrupt. 

That  losses  happened  on  such  policies  to  the  amount  of  655/.  9s.  7d.  be- 
fore the  bankruptcy  of  Bartenshlag,  and  were  adjusted  by  him.  That  a 
loss  on  another  policy  to  the  amount  of  61.  Os.  3d.  happened  before  the  said 
bankruptcy,  but  was  not  adjusted  till  after  such  bankruptcy. 

That  the  plaintiff  paid  the  amount  of  the  losses  to  his  foreign  correspon- 
dents after  such  bankruptcy. 

That  the  plaintiff  had  a  commission  del  credere  from  his  correspondents, 
was  made  debtor  by  the  bankrupt  for  the  premiums,  and  always  retained 
the  policies  in  his  hands. 

That  a  dividend  of  10s.  in  the  pound  was  declared  under  the  said  com- 
mission on  the  15th  of  June,  1782. 

That  at  the  time  of  the  bankruptcy  there  was  due  from  the  plaintiff  to 
the  bankrupt  the  sum  of  1356/.  Os.  3d.  And  there  was  duo  from  the  bank- 
rupt for  the  above  losses  661/.  9«.  lOd. 

That  on  the  15th  of  March,  1782,  the  jjlaintiff  paid  to  the  defendants  the 
8imi  of  750/.,  and  on  the  1 7th  of  November,  1785,  the  further  sum  of  606/. 
0«.  3(/.,  amounting  to  1356/.  Os.  3(/. 


76  BIZE   V.   DICKASON.  [CHAP,  II. 

And  on  the  18th  November,  1785,  the  plaintiff  proved  the  said  sum  of 
66U.  9s.  lOd.  under  the  said  commission. 

That  the  plaintiff  never  received  any  dividend  under  the  commission  for 
or  on  account  of  the  said  losses. 

That  a  final  dividend  of  the  effects  of  the  said  bankrupt  was  declared  by 
the  said  commissioners  on  the  24th  day  of  January,  1786. 

That  on  the  1st  of  February,  1786,  previous  to  such  dividend  being  paid, 
the  plaintiff  caused  a  notice  to  be  served  on  the  defendants,  purporting  that 
he  had  paid  them  the  said  sura  of  1356^.  Os.  3d  under  a  mistaken  idea, 
without  deducting  therefrom  the  said  66 U.  9s.  lOd.  for  the  aforesaid  losses 
on  the  said  several  policies  subscribed  by  the  bankrupt,  for  whom  he  was 
del  credere  to  the  said  foreign  correspondents,  and  had  paid  such  losses  ac- 
cordingly ;  and  cautioning  them  against  making  any  dividend  until  he  was 
paid  the  said  sum  of  661 Z.  9s.  10c?. 

That  there  is  now  in  the  hands  of  the  said  defendants  effects  of  the  bank- 
rupt more  than  sufficient  to  satisfy  the  demand  of  the  plaintiff. 

The  question  for  the  opinion  of  the  Court  is.  Whether  the  plaintiff  is  en- 
titled to  recover  in  this  action?  If  the  plaintiff  is  entitled  to  recover  in 
this  action  the  verdict  to  stand.  But  if  the  Court  shall  be  of  opirfion  that 
the  plaintiff  is  not  entitled  to  recover,  then  a  verdict  to  be  entered  for  the 
defendants. 

Smith  was  to  have  argued  for  the  plaintiff,  but  Ilingay  for  the  defend- 
ants declined  arguing  the  case. 

The  Court  being  of  opinion  that  it  came  within  the  principle  of  the  case 
of  Grove  v.  Dubois  ;  ^    and  — 

Lord  Mansfield,  Ch.  J.,  said,  The  rule  had  always  been,  that  if  a  man 
has  actually  paid  what  the  law  would  not  have  compelled  hira  to  pay,  but 
what  in  equity  and  conscience  he  ought,  he  cannot  recover  it  back  again  in 
an  action  for  money  had  and  received.  So  where  a  man  has  paid  a  debt, 
which  would  otherwise  have  been  barred  by  the  statute  of  limitations  ;  or  a 
debt  contracted  during  his  infancy,  which  in  justice  he  ought  to  discharge, 
though  the  law  would  not  have  compelled  the  payment,  yet  the  money 
being  paid,  it  will  not  oblige  the  payee  to  refund  it.  But  where  money  is 
paid  under  a  mistake,  which  there  was  no  ground  to  claim  in  conscience, 
the  party  may  recover  it  back  again  by  this  kind  of  action. 

Judgment  for  the  plaintiff. 

»  1  T.  R.  112. 


SECT.  I.]  BILBIE  V.   LUMLEY.  77 


BILBIE  V.   LUMLEY    and    Others. 

In  the  King's  Bench,  June  28,  1802. 

[Rrporled  in  2  East,  469.] 

This  was  an  action  for  money  had  and  received,  and  upon  other  common 
counts,  which  was  brought  by  an  underwriter  upon  a  policy  of  insurance,  in 
order  to  recover  back  100/.  which  he  had  paid  upon  the  policy  as  for  a  loss 
by  capture  to  the  defendants,  the  assured.  The  ground  on  wliich  the  action 
was  endeavored  to  be  sustained  was,  that  the  money  was  paid  under  a  mis- 
tiike,  the  defendants  not  having  at  the  time  of  insurance  effected,  disclosed 
to  the  underwriter  (the  present  plaintiff)  a  material  letter  which  had  been 
before  received  by  them,  relating  to  the  time  of  sailing  of  the  ship  insured. 
It  was  not  now  denied  that  the  letter  was  material  to  be  disclosed ;  but  the 
defence  rested  on  now  and  at  the  trial  was,  that  before  the  loss  on  the  pol- 
icy was  adjusted,  and  the  money  paid  by  the  present  plaintiff,  all  the 
papers  had  been  laid  before  the  underwriters,  and  amongst  others  the  letter 
in  question  ;  and  therefore  it  was  contended  at  the  trial  before  Hooke,  J., 
at  York,  that  the  money  having  been  paid  with  full  knowledge,  or  with  full 
means  of  knowledge  of  all  the  circumstances,  could  not  now  be  recovered 
back  again.  On  the  other  hand,  it  was  insisted  that  it  was  sufficient  to 
sustain  the  action  that  the  money  had  been  paid  under  a  mistake  of  the 
law ;  the  plaintiff  not  being  apprized  at  the  time  of  the  payment  that  the 
concealment  of  the  particular  circumstance  disclosed  in  the  letter  kept  back, 
was  a  defence  to  any  action  which  might  have  been  brought  on  the  policy ; 
and  the  learned  judge  being  of  that  opinion,  the  plaintiff  obtained  a  verdict. 

A  rule  nisi  was  granted  in  the  last  term  for  setting  aside  the  verdict  and 
having  a  new  trial,  which  was  to  have  been  supported  now  by  Park  for 
the  defendants,  and  opposed  by  Wood  for  the  plaintiff.  But  after  the  re- 
port was  read,  and  the  fact  clearly  ascertained  that  the  material  letter  in 
question  had  been  submitted  to  the  examination  of  the  underwriters  bcfoi'e 
the  adjustment, — 

Lord  ELLENBonouGH,  C.  J.,  asked  the  plaintiff's  counsel  whether  he 
could  state  any  case  where,  if  a  party  paid  money  to  another  voluntarily 
with  a  full  knowledge  of  all  the  facts  of  the  case,  he  could  recover  it  back 
again  on  account  of  his  ignorance  of  the  law  1  [No  answer  being  given,  his 
Lordship  continued  :  ]  The  case  of  Chatfield  v.  I'axton  ^  is  the  only  one  I 

*  That  case  came  before  this  Court  on  a  motion  for  a  now  trial  in  M.  39,  Geo.  3.  The 
circtimsUinces  were  so  sjiecial,  and  there  was  so  miicli  of  (loti))t  in  it,  that  it  was  not 
thought  to  Ix!  of  any  use  to  ri'port  it.  The  outline  of  it  was  tliis  :  A  mercantile  house  in 
Intlia  (of  which  the  defendant  was  a  survivinj;  j)artner  residinj^  here  at  the  time)  received 
a  bill  drawn  by  the  i>laintiir  on  another   house  in  payment  of  a  debt,   which  bill  the 


78  BILBIE   V.   LUMLEY.  [CHAP.  II. 

ever  heard  of,  where  Lord  Kenyon  at  nisi  prius  intimated  something  of 
that  sort.  But  when  it  was  afterwards  brought  before  this  Court,  on  a 
motion  for  a  new  trial,  there  were  some  other  circumstances  of  fact  relied 
on ;  and  it  was  so  doubtful  at  last  on  what  precise  ground  the  case  turned, 
that  it  was  not  reported.  Every  man  must  be  taken  to  be  cognizant  of  the 
law ;  otherwise  there  is  no  saying  to  what  extent  the  excuse  of  ignorance 
might  not  be  carried.  It  would  be  urged  in  almost  every  case.  In  Lowrie 
V.  Eourdieu,^  money  paid  under  a  mere  mistake  of  the  law  was  endeavored 
to  be  recovered  back ;  and  there  Buller,  J.,  observed  that  ignorantia  juris 
non  excusat,  &c.  Bide  absolute. 

defendant's  house  made  their  own  by  laches  ;  but  not  apprizing  the  plaintiff  of  this,  they 
sent  him  back  the  bill  protested  for  non-payment,  and  drew  upon  him  for  the  same 
amount  in  favor  of  a  mercantile  house  in  London  (some  of  whom,  amongst  others  the 
defendant,  were  also  partners  in  the  house  in  India).  The  plaintiff,  ignorant  of  the 
laches  of  the  liouse  in  India,  accepted  the  new  bill ;  but  before  payment  he  received  some 
information  of  the  laches  ;  yet  not  such  particular  proof  of  it  as  would  have  enabled  him 
to  defend  liimself  against  the  demand  upon  his  acceptance  in  a  court  (even  if  the  liouse 
in  India  were  to  be  considered  the  same  as  that  in  London).  Therefore  the  plaintiff  paid 
his  acceptance,  and  afterwards  brought  this  action  to  recover  the  money  back  from  the 
defendant  as  a  partner  in  the  house  in  India,  and  obtained  a  verdict  under  the  direction 
of  Lord  Kenyon.  Upon  the  motion  for  the  new  trial,  his  Lordship  and  Asn hurst,  J. 
were  clearly  of  opinion  that  the  action  was  maintainable  ;  considering  as  it  seemed  that 
the  defendant's  house  in  India  had  obtained  the  plaintiff's  acceptance  in  the  first  in- 
stance by  a  fraudulent  concealment  of  their  laches,  and  that  the  plaintiff  had  not  volun- 
tarily and  with  a  fair  knowledge  of  his  case  submitted  to  pay  it,  but  had  paid  it  from 
the  necessity  of  the  thing,  and  under  a  protest  that  if  on  his  arrival  in  India  he  after- 
wards found  his  suspicions  confirmed  he  should  call  upon  the  house  there  to  indemnify 
him.  AsiniuusT,  J.,  added,  that  where  a  payment  had  been  made,  not  with  full  knowl- 
edge of  the  facts,  but  only  under  a  blind  suspicion  of  the  case,  and  it  was  found  to  have 
been  paid  unjustly,  the  party  might  recover  it  back  again.  That  here  the  plaintiff  was 
nnder  great  uncertainty  of  the  facts  at  the  time  he  accepted  the  bill,  and  even  if  he  knew 
them  all  before  actual  payment  yet  that  his  knowledge  would  have  come  too  late,  and  it 
would  have  been  no  answer  to  an  action  by  the  payees  who  were  not  parties  to  the  trans- 
action ;  but  that  his  proper  remedy  was  against  those  persons  by  whose  misconduct  he 
was  placed  in  that  situation.  Grose,  J.,  said  he  had  great  difficulty  in  adopting  the 
opinion  of  the  two  other  Judges  to  the  full  extent  of  it  ;  principally  because  he  was  not 
satisfied  that  the  plaintiff  had  not  a  sufficient  knowledge  of  the  ground  of  his  defence 
before  payment  of  the  bill,  whatever  he  might  have  had  when  he  accepted  it  ;  but  as  the 
verdict  was  with  the  honesty  of  the  case,  he  inclined  against  disturbing  it  ;  and  the 
rather,  because  he  doubted  whether  the  house  in  India  and  that  in  London  were  to  be 
considered  as  the  same,  so  that  the  plaintiff  could  have  resisted  the  payment  of  the  bill 
to  the  latter,  because  one  of  their  partnei-s  (the  defendant)  was  also  a  partner  in  the 
other  house,  though  he  had  no  knowledge  in  fact  of  the  laches.  Lawrence,  J.,  also 
doubted  on  the  former  ground,  as  the  plaintiff  seemed  to  have  been  apprized  before  pay- 
ment of  the  bill  of  the  general  outline  of  his  defence  ;  but  as  he  was  not  then  so  conver- 
sant of  the  particular  facts  now  appearing  as  to  have  been  able  to  resist  the  demand  then 
made  on  him  if  an  action  had  been  brought,  but  seemed  to  have  had  only  a  confused 
notion  of  them,  expecting  to  be  better  informed  when  he  arrived  in  India,  he  doubted 
how  far  the  maxim  volenti  non  fit  injuria  could  be  applied  to  him. 
»  Dougl.  467. 


SECT.  I.]  BRISBANE   V.   DACRES.  79 


SIR    CHARLES    BRISBANE,    KNT.    v.    DACRES,    Widow, 
Executrix   of   ADMIRAL   DACRES. 

Ix  TUE  Common  Plfas,  July  6,  1813. 

[Reported  in  5  Taunton,  144.] 

Tins  was  an  action  of  assumpsit  for  money  had  and  received,  to  which 
the  defendant  pleaded  the  general  issue,  and  at  the  trial  of  the  cause  before 
Mansfield,  C.  J.,  at  the  first  sittings  within  Hilary  Term,  1813,  a  verdict 
was  found  for  the  defendant,  subject  to  the  opinion  of  the  court  on  the 
following  case. 

In  the  j-ear  1804,  J.  R.  Dacres,  Esq.,  the  defendant's  testator,  was  ap- 
pointed commander-in-chief  of  his  majesty's  ships  and  vessels  on  the 
Jamaica  Station,  and  before  and  at  the  time  of  the  sailing  of  H.  M.  S., 
the  Arethusa,  as  hereinafter  mentioned,  slie  was  under  the  command  of 
Admiral  Dacres,  as  such  commander-in-chief,  and  while  she  continued 
under  such  his  command,  he,  in  the  month  of  April,  1808,  ordered  the 
plaintiff  (who  was  then  captain  or  commander  of  the  Arethusa,  then  lying 
off  Jamaica),  to  receive  on  board  thereof  .$700,000  belonging  to  govern- 
ment, and  proceed  with  the  same  to  Portsmouth.  The  plaintiff  in  pursu- 
ance of  and  under  that  order  received  the  dollars  on  board,  and  sailed  to, 
and  delivered  them  at  Portsmouth.  The  Arethusa,  previous  to  her  so 
sailing,  also  received  on  board  $1,530,000  belonging  to  private  individuals, 
which  the  plaintiff  caused  to  be  delivered  at  the  Bank  of  England,  for  the 
use  and  benefit  of  the  persons  to  whom  they  were  consigned,  in  conformity 
to  bills  of  lading  signed  by  him  for  such  delivery.  The  plaintiff  on  the 
third  day  of  November,  1808,  received  through  his  agent,  from  the  Bank 
of  England,  for  the  freight  of  the  81,530,000  belonging  to  private  indi- 
viduals, the  sum  of  7438/.  18s.  5J.  The  plaintiff  also,  through  his  agent, 
on  the  16th  day  of  ^farch,  1809,  received  from  his  majesty's  treasur}-, 
for  the  freight  of  the  dollars  belonging  to  government,  the  sum  of  850/. 
net,  by  virtue  of  the  following  warrant:  "  Geouge  Rex,  —  Our  will  and 
pleasure  is,  that  out  of  any  money  in  your  hands  that  may  be  imprested 
to  you  for  this  service,  yo>i  do  issue  and  pay,  or  cause  to  be  issued  and 
paid,  unto  our  trusty  and  well-beloved  Sir  Charles  Brisbane,  or  his  assigns, 
the  sum  of  850/.  without  deduction  and  without  account,  which  we  are 
graciously  pleased  to  allow  him  fjr  freight  of  specie,  conveyed  by  him  on 
board  our  ship  Arethusa  from  Jamaica  to  Portsmouth  ;  and  this  shall  bo 
as  well  to  you  for  making  the  said  ])ayment,  as  to  the  commissioners  for 
auditing  our  public  accounts,  as  all  others  concerned  in  passing  your  said 
accounts,  for  allowing  the  same  thereupon,  a  sufficient  warrant.     Given  at 


80  BRISBANE   V.    DACRES.  [CHAP.  11. 

St.  James's,  15  November,  1808.  By  his  majesty's  command,  W.  Broderick, 
Sp.  Perceval,  W.  S.  Bourne.  To  the  paymaster  general  of  guards,  garrisons, 
and  land  forces.  Sir  C.  Brisbane,  850/.,  for  freight  on  specie  convej-ed  by 
him  from  Jamaica  to  Portsmouth."  When  an  order  is  so  given  by  an 
admiral  commanding-in-chief  to  a  captain,  the  latter  acts  under  the  com- 
mand of  the  admiral,  and  not  under  a  separate  admiralty  order ;  and  the 
Arethusa  was  despatched  on  this  service  by  Admiral  Dacres,  and  during 
the  whole  of  such  service  was  acting  under  his  orders. 

The  case  then  stated  the  usage  of  the  navy  with  respect  to  payment  of 
freight  on  the  carriage  of  bullion,  previous  to  the  year  1801,  the  discontinu- 
ance of  it  in  that  year,  the  correspondence  between  the  Secretary  of  the 
Admiralty  and  the  Secretary  of  the  Treasury,  which  took  place  in  1807, 
and  the  orders  of  the  Lords  of  the  Admiralty  made  thereupon,  in  the  same 
terms  as  the  same  are  detailed  in  the  case  of  Montague  v.  Janverin.^  The 
case  further  stated  that  since  the  making  of  such  order  the  captains  of  his 
majesty's  navy  have  constantly  received  the  allowance  therein  mentioned 
for  conveying  public  money,  and  according  to  the  usage,  had  been  reqiiired 
to  pay,  and  had  paid,  as  well  one-third  thereof,  as  also  one-third  of  the 
freight  for  conveying  private  money,  to  the  commander-in-chief,  under 
whose  command  they  were;  and  that  in  the  present  case,  the  sum  of  2500?. 
was  on  the  22d  of  November,  1808,  paid  by  the  prize  or  navy  agent  of  the 
plaintiff  (by  whom  the  same  had  been  previously  received),  to  the  late 
Admiral  Dacres,  on  account,  and  in  part  payment  of  one-third  of  the  freight 
of  the  money  so  conveyed  by  the  Arethusa,  —  that  is  to  say,  the  sum  of 
2479/.  12s.  9d.,  for  one-third  of  the  freight  of  the  private  money,  and  the 
sum  of  20/.  7s.  3d.,  residue  of  the  2500/.,  on  account,  and  in  part,  of  one- 
third  of  the  freight  of  the  public  money  so  conveyed  by  that  ship,  which 
payment  was  made  on  the  behalf,  and  account,  and  with  the  sanction  of 
the  plaintiff,  with  knowledge  of  the  circumstances  befoi'e  stated,  but  imder 
an  idea  of  a  right  in  the  admiral  to  a  third  of  such  freight,  on  the  ground 
of  the  before-mentioned  usage ;  and  for  the  recovery  of  which  sum  of  2500/., 
the  present  action  was  brought.  The  question  for  the  opinion  of  the  court 
was,  whether  under  the  circumstances  stated  the  plaintiff  was  entitled  to 
recover  :  if  he  was,  the  verdict  was  to  be  entered  for  the  plaintiff,  for 
Buch  sum  as  the  court  should  direct  j  and  if  not,  the  present  verdict  for 
the  defendant  was  to  stand. 

Best,  Serjt.,  for  the  plaintiff. 

Lens,  Serjt.,  for  the  defendant. 

On  this  day  the  judges  of  the  court  delivered  their  opinions  seriatim. 

GiBBS,  J.,  read  the  warrant.  1  read  this  particularly,  because  it  has  been 
contended  that  the  terms  of  the  warrant  give  the  reward  to  the  captains 
exclusively.  I  do  not  know  that  it  is  necessary  for  me  to  state  the  corres- 
pondence ;  the  sum  of  it  is  this,  that  the  Lords  of  the  Treasury  proposed 

1  i  Taunt.  446. 


SECT.  I.]  BRISBANE   V.    DACRES.  81 

to  the  Lords  of  the  Admiralty  that  a  certain  sum  should  be  paid  to  tho 
commanders  of  ships  of  war  which  should  carry  dollars;  the  Admiralty 
fell  into  this,  and  agreed  that  an  allowance  should  be  made  to  the  com- 
manders of  such  ships  as  shall  carry  treasure ;  the  purpose  of  setting  out 
these  letters  is,  to  show  that  the  terms  of  them  apply  only  to  the  captains 
commanding  these  ships,  without  any  reference  to  the  admirals.  The  case 
then  states  that  the  payment  was  made  on  the  behalf  and  accouut  and 
with  the  sanction  of  the  plaintiff,  but  under  an  idea  that  he  was  bound  to 
pay  it  under  the  practice.  "With  respect  to  the  freight  of  private  dollars, 
we  are  all  agreed  ;  and  as  Captain  Brisbane  had  no  right  to  carry  those 
dollars  at  all,  and  stipulated  for  and  received  a  freight  to  which  he  had  no 
right,  and  afterwards,  in  pursuance  of  an  understanding  with  Admiral  Dacres, 
imparted  a  part  to  him  in  manner  agreed  on ;  we  are  all  of  opinion,  that 
this  carrying  of  the  dollars  was  an  illegal  transaction,  that  the  whole  which 
followed  was  tainted  with  the  same  illegality,  and  that  the  money  paid 
cannot  be  recovered  at  all,  inasmuch  as  the  captain  could  not  lawfully 
employ  the  ship  and  crew,  which  ought  to  be  employed  in  the  service  of 
his  majesty,  in  carrying  bullion  for  individuals.  I  think  as  to  the  20/.,  he 
cannot  recover  back  the  one-third  of  that.  We  must  take  this  payment 
to  have  been  made  under  a  demand  of  right,  and  I  think  that  where  a  man 
demands  money  of  another  as  a  matter  of  right,  and  that  other,  with  a  full 
knowledge  of  the  facts  upon  which  the  demand  is  founded,  has  paid  a  sum, 
he  never  can  recover  back  the  sum  he  has  so  voluntarily  paid.  It  may  bO; 
that  upon  a  further  view  he  may  form  a  different  opinion  of  the  law,  and 
it  may  be,  his  subsequent  opinion  may  be  tlie  correct  one.  If  we  were  to 
hold  otherwise,  I  think  many  inconveniences  may  arise.  There  are  many 
doubtful  questions  of  law  :  when  they  arise,  the  defendant  has  an  option 
either  to  litigate  the  question,  or  to  submit  to  the  demand  and  pay  the 
money.  I  think,  that  by  submitting  to  the  demand,  he  that  pays  the 
money  gives  it  to  the  person  to  whom  he  pays  it,  and  makes  it  his,  and 
closes  the  transaction  between  them.  He  who  receives  it  has  a  right  to 
consider  it  as  his  without  dispute  :  he  spends  it  in  confidence  that  it  is  his; 
and  it  would  be  most  mischievous  and  unjust,  if  he  who  has  acquiesced  in 
the  right  by  such  voluntary  payment  should  be  at  liberty,  at  any  time 
within  the  statute  of  limitations,  to  rip  up  the  matter,  and  recover  back 
the  money.  He  who  received  it  is  not  in  the  same  condition;  he  has  spent 
it  in  the  confidence  it  was  his,  and  perhaps  has  no  means  of  repayment. 
I  am  aware  cases  were  cited  at  the  bar,  in  which  were  dicta  that  sums  paid 
irndtT  a  mistake  of  the  law  might  be  recuveiX'd  back,  though  paid  with  a 
knowledge  of  the  facts;  but  there  are  none  fif  these  cases  which  may  not 
be  supported  on  a  much  sounder  ground.  In  the  case  of  Farmer  v.  Arundel,^ 
I)e  (Ikkv,  C.  J.,  indeed  says:  "When  money  is  paid  by  one  man  to  another 
ou  a  mistake  either  of  fact  or  of  law,  or  by  deceit,  this  action  (of  money 

1  2  Bl.  R.  825. 


82  BRISBANE   V.   DACKES.  [CHAP.  II. 

had  and  received)  will  certainly  lie."  Now  the  case  did  not  call  for  this 
proposition  so  generally  expressed ;  and  I  do  think,  that  doctrine,  laid  down 
so  very  widely  and  generally,  where  it  is  not  called  for  by  the  circumstances 
of  the  case,  is  but  little  to  be  attended  to ;  at  least  it  is  not  entitled  to  the 
same  weight  in  a  case  where  the  attention  of  the  court  is  not  called  to  a 
distinction,  as  it  is  in  a  case  where  it  is  called  to  the  distinction.  Now  in 
the  very  next  case  cited,  Lowry  v.  Bourdieu,^  which  was  so  early  as  21 
G.  3,  the  distinction  is  taken.  After  the  other  judges,  Buller,  J.  says : 
"  I  am  clear  that  the  plaintiif  ought  not  to  recover,  for  there  is  no  fraud 
on  the  part  of  the  underwriters ;  and  in  a  case  where  there  is  no  mistake 
of  fact,  or  ignorance  of  fact,  the  money  cannot  be  recovered  back,  for  the 
rule  applies,  that  ignorantia  legis  non  excusat"  This  distinction  was  thus 
pointedly  stated  in  the  presence  of  Lord  Mansfield,  who  heard  it,  and 
whose  attention  must  be  called  to  it ;  and  he  at  the  end  of  the  case  guards 
the  world  against  the  conclusion  that  in  no  case  can  money  paid  on  an 
illegal  transaction  be  recovered  back ;  for  in  case  of  extortion,  he  says,  it 
may.  I  mention  this  to  show,  that  althougli  Lord  Mansfield  spoke  imme- 
diately after  Buller,  J.,  and  must  have  heard  and  noticed  his  doctrine, 
he  expresses  no  dissatisfaction  with  it.  The  next  case  is  Bize  v.  Dickason,^ 
an  action  brought  by  an  insurance-broker  to  recover  back  from  the  assignees 
of  a  bankrupt  so  much  of  a  sum  of  money  which  the  plaintiff  had  paid  to 
the  assignees  for  a  debt  due  to  the  bankrupt,  as  the  plaintiff  might  have 
deducted  by  way  of  set-off  by  reason  of  losses  which  had  accrued  before 
the  bankruptcy  upon  policies  effected  by  the  plaintiff  and  subscribed  by  the 
bankrupt.  It  is  most  certain  that  the  only  question  brought  under  the 
consideration  of  the  court  in  that  case  was,  whether  the  right  of  the  broker, 
who  had  a  del  credere  commission  to  make  the  deduction,  ranged  itself 
under  the  case  of  Grove  v.  Dubois,^  and  Mingay  declined  all  argument,  and 
gave  up  the  case.  It  was  taken  for  granted  without  argument,  that  if 
the  plaintiff  would  have  had  a  right  to  make  the  deduction  before  payment, 
he  might  recover  back  the  amount  after  payment.  Lord  Mansfield  men- 
tioned in  his  judgment  many  cases  where  money  paid  could  not  be  recovered 
back,  although,  if  it  had  not  been  paid,  it  could  not  have  been  enforced ; 
and  he  concludes  by  saying,  that  where  money  is  paid  imder  a  mistake, 
which  there  was  no  ground  to  claim  in  conscience,  it  may  be  recovered 
back.  IMistake  may  be  a  mistake  of  law  or  of  fiict ;  but  I  cannot  think 
Lord  Mansfield  said  "  mistake  of  law  ;"  for  Lord  Mansfield  had,  six  years 
before,  in  Lowry  v.  Bourdieu,  heard  it  said,  "  money  paid  in  ignorance  of 
the  law  could  not  be  recovered  back,"  and  had  not  dissented  from  the 
doctrine ;  and  Buller,  J.,  sate  by  him,  who  had  expressly  stated  the  distinc- 
tion six  years  before  in  Lowry  v.  Bourdieu,  and  would  not  have  sate  by  and 
heard  the  contrary  stated  without  noticing  it.  Lord  Mansfield's  dictum 
is,  that  money  paid  by  mistake,  which  could  not  be  claimed  in  conscience, 

i  Doug.  471.  2  1  T.  R.  285.  "  1  T.  E.  112. 

6 


SECT.  I.]  BRISBANE   V.   DACRES.  83 

might  be  recovered  back.  I  have,  however,  considerable  difficulty  in  saymg 
that  there  was  anything  unconscientious  in  Admiral  Dacres,  in  requiring 
this  money  to  be  paid  to  him,  or  receiving  it  when  it  was  paid.  Ever  since 
the  date  of  this  correspondence,  it  had  been  the  practice  of  the  adrainxls 
to  receive  this ;  their  right  to  it  had  never  been  questioned  at  the  time 
when  Admiral  Dacres  received  this  sum.  Chatfield  v.  Paxton,  B.  R., 
39  G.  3,  Mich.  Term.  A  bill  h.ad  been  paid  by  the  plaintiff  to  the 
defendant's  house  in  India,  which  was  dishonored  in  consequence  of  the 
defendants  having  been  guilty  of  laches,  which  they  did  not  disclose.  The 
bill  was  protested  and  sent  back  to  England,  and  the  plaintiff  was  called 
on  in  England  to  pay  it,  certainly  under  an  ignorance  of  the  circumstances 
\Thich  had  taken  place  in  India.  In  consequence  of  this  demand  he 
accepted  another  bill ;  and  before  that  bill  was  mature,  a  correspondence 
took  place,  which,  as  I  contended,  informed  the  plaintiff  of  all  the  cir- 
cumstances attending  the  presenting  of  the  first  bill,  and  showed  that 
Chatfield  need  not  have  accepted  that  second  bill,  and  therefore  that 
he  need  not  have  paid  it ;  but  he  did  pay  it,  and  I,  for  the  defendant, 
contended  that  eitlier  he  ought,  relying  upon  that  defence,  not  to  have 
paid  it,  or  that  having  paid  it  he  could  not  recover  it  back.  Lord  Ken  vox 
at  nisi  prius  commented  on  the  letters :  one  said  that  the  plaintiff  was 
going  to  Bengal,  where  he  hoped  to  gain  a  more  full  knowledge  of  the  case. 
Lord  Kenyon  stated,  that  although  the  letters  might  amount  to  evidence 
of  knowledge  of  the  facts,  they  did  not  show  an  acquiescence  in  the  loss 
of  the  money,  and  he  thought  a  payment  made  under  an  ignorance  of  the 
law  would  enable  the  plaintiff  to  recover  Ixack  the  money.  He  also  added, 
that  perhaps  the  party,  though  he  know  both  the  law  and  the  fact,  3'et  if 
he  paid  both  under  fear  of  arrest,  for  want  of  evidence  to  maintain  his 
case,  might  afterwards  recover  it ;  to  that  doctrine  I  acceded,  and  still 
accede ;  but  I  moved  for  a  new  trial,  on  the  misdirection  of  the  judge  upon 
the  first  point,  that  money  paid  under  ignorance  of  the  law,  with  knowledge 
of  the  facts,  might  be  recovered  back ;  whereas,  I  said,  if  it  had  been  paid 
with  ignorance  of  the  facts,  but  with  knowledge  of  the  law,  it  might  be 
recovered.  On  the  discussion  of  the  rule  nisi,  not  one  of  the  court  espoused 
the  doctrine  of  Lord  Kenyon  or  attempted  to  support  it,  but  they  recurred 
to  the  letters,  and  found  those  pa.S8agea  in  them,  from  whence  thi-y  inferred 
that  the  plaintiff  was  ignorant  of  a  part  of  the  facts :  it  was  a  very  com- 
plicated case.  Lord  Kknyon  at  that  time,  and  Ashhurst,  J.,  put  it  wholly 
on  the  ground  of  the  plaintiffs  not  having  had  a  knowledge  of  the  facts. 
They  go  on  to  say,  that  whore  a  man  pays  witfiout  knowledge,  but  only 
with  a  blind  suspicion  of  the  facts,  still  he  may  recover.  Guose,  J.,  doubts 
whether  the  plaintiff  was  not  acquainted  with  the  facts  before  he  paid  the 
bill  ;  but  he  tacitly  adiiiitH  that  if  the  plaintiff  did  know  the  facta,  then 
the  money  could  not  bo  recovered  :  so  that  he  muHt  be  couHidcred  as  being 
clearly  of  opinion,  that  if  it  was  paid  with  a  knowledge  of  all  the  facts,  it 


84  BRISBANE   V.   DACRES.  [CHAP.  11. 

could  not  be  recovered  back  :  and  Lawrence,  J.,  doubted,  not  whether  the 
plaintiff  had  knowledge  of  the  law,  but  of  the  facts ;  for  that  although  the 
plaintiff  seemed  to  have  been  apprized  before  he  paid  the  bill,  of  the  gen- 
eral outline  of  his  defence,  he  was  not  then  so  conversant  with  the  particu- 
lar facts  now  appearing,  as  to  have  been  able  to  resist  the  demand  then 
made  on  him,  if  an  action  had  been  brought.  Here  then  is,  I  may  say, 
the  ultimate  opinion  of  Lord  Kenyon,  for  he  first  directed  the  jury  it 
might  be  recovered  back  if  paid  with  a  knowledge  of  the  facts  but  with- 
out knowledge  of  the  law,  which  opinion  he  wholly  afterwards  abandons. 
Among  all  the  practitioners  of  the  court  of  King's  Bench,  where  questions 
of  this  sort  very  frequently  arise  on  insurance  transactions,  we  were  uni- 
versally of  this  opinion,  that  where  the  money  was  paid  with  a  knowledge  of 
the  facts,  it  could  not  be  recovered  back.  One  iniderwriter  chose  to  pay 
rather  than  resist,  another  resisted  and  succeeded ;  in  all  similar  cases  it 
would  be  verj'  easy  to  say,  "  I  paid  this  without  a  knowledge  of  the  law, 
and  therefore  may  recover  it  back."  Our  only  question,  then,  in  all  cases 
was,  whether  the  fiicts  were  known.  This  was  the  universal  practice,  till 
Bilbie  V.  Lumley,*  occurred :  that  case  was  tried  at  York,  before  PiOOKe,  J., 
who  ruled  differently  :  after  the  report  was  read,  Lord  Ellexborough 
asked  Wood,  B.,  then  of  counsel  for  the  plaintiff,  whether  he  could  find 
any  case  which  would  support  it ;  and  he  cited  none.  Lord  Ellenborough 
said  he  never  heard  of  any,  except  Chatfield  v,  Paxton,  and  that  it  was  so 
doubtful  at  last  upon  what  precise  ground  that  case  turned  that  it  was 
not  reported,  and  the  rule  was  made  absolute  for  a  new  trial.  Now  this 
was  a  direct  decision  upon  the  point,  certainly  without  argument ;  but  the 
counsel,  whose  learning  we  all  know  and  who  was  never  forward  to  give 
up  a  case  which  he  thought  he  could  support,  abandoned  it.  In  Herbert 
V.  Champion,*  a  distinction  is  clearly  taken  between  an  adjustment  on  a 
policy,  and  a  payment  on  the  adjustment;  and  Lord  Ellenborough  says, 
that  if  the  money  has  been  paid,  it  cannot  be  recovered  back  without 
proof  of  fraud.  I  am  therefore  of  opinion  this  money  cannot  be  recovered 
back.  I  think  on  principle  that  money  which  is  paid  to  a  man  who  claims 
it  as  his  right,  with  a  knowledge  of  all  the  facts,  cannot  be  recovered  back. 
I  think  it  on  principle,  and  I  think  the  weight  of  the  authorities  is  so,  and 
I  think  the  dicta  that  go  beyond  it  are  not  supported  or  called  for  by  the 
facts  of  the  cases.  Bilbie  v.  Lumley,  I  think,  is  a  decision  to  that  effect ; 
and  for  these  reasons,  I  am  of  opinion,  the  plaintiff  is  not  entitled  to 
recover. 

Chambre,  J.  I  concur  in  thinking  the  money  is  not  recoverable  on  the 
payment  of  the  private  freight,  whether  the  carriage  of  the  treasure  be 
considered  as  a  legal  or  as  an  illegal  transaction.  If  illegal,  the  money 
clearly  cannot  be  recovered ;  if  it  be  legal,  the  right  to  carry  it  must  arise 
from  the  permission  of  government;  and  as  the  practice  has  been  uniform 
1  2  East,  469.  ^  1  Camp.  134. 


SECT.  I.]  BRISBANE    V.   DACRES.  85 

for  the  admiral  to  receive  his  third  part,  we  must  take  it  that  it  is  a  part 
of  the  practice,  and  that  the  whole  practice  has  had  that  assent  of  the 
government.  As  to  tlie  freight  for  the  carriage  of  the  public  property,  I 
think  it  stands  on  a  different  ground,  and  that  the  action  is  maintainable. 
The  plaintiff  had  a  riglit  to  it,  and  the  defendant  in  conscience  ought  not 
to  retain  it.  The  rule  is,  that  when  he  cannot  in  conscience  retain  it  he 
must  refund  it,  if  there  is  nothing  illegal  in  the  transaction  :  the  case  is 
different  where  there  is  an  illegality.  1  do  not  think  the  case  of  Chatfield 
V.  Paxton  applies  much  in  this  view  of  the  question.  I  never  heard  of  the 
several  parts  of  that  case  till  now,  but  I  think  there  are  sufficient  authori- 
ties to  say  this  person  has  paid  this  money  in  his  own  wrong,  and  that  it 
may  be  recovered  back.  In  the  case  of  Bilbie  v.  Lumley  there  was  a  letter 
said  to  have  been  concealed,  that  ought  to  have  been  disclosed  :  this  letter 
was  shown  to  the  underwriters,  and  they  after  reading  it  thought  fit  to 
pay  the  money.  Now  there  the  maxim  volenti  non  fit  injuria  applies :  in 
that  case  all  argument  was  prevented  by  a  question  put  by  the  coiirt  to 
the  counsel.  I  am  not  aware  of  any  particular  danger  in  extending  the 
law  in  cases  of  this  sort,  for  they  are  for  the  furtherance  of  justice;  neither 
do  I  see  the  apjjlication  of  the  maxim  used  by  Buller,  J,,  in  the  case  of 
Lowry  V.  Dounlieu,  and  cited  by  the  court  in  Bilbie  v.  Lumley,  ignorantia 
juris  non  excusat ;  it  applies  only  to  cases  of  delinquency,  where  an  excuse 
is  to  bo  made  :  I  have  searched  far,  to  see  if  I  could  find  any  instance  of 
similar  application  of  this  maxim.  I  have  a  very  large  collection  of  maxims, 
but  can  find  no  instance  in  which  this  has  been  so  applied.  I  cannot  sec 
how  it  applies  here.  In  Lowry  v.  Bourdieu,  the  decision  turned  on  the 
transaction  boing  illegal,  and  it  being  illegal  the  maxim  applied,  in  pari 
delicto  potior  est  conditio  de/endentis.  Moses  v.  Macforlan,*  and  a  number 
of  subsequent  cases  decide,  that  where  the  plaintiff  is  entitled,  ex  cpquo  et 
bono,  to  recover,  he  may  recover.  In  Farmer  v.  Arundel,  the  opinion  of 
Dk  Grev  is  not  a  mere  dictum,  it  is  part  of  the  argument,  it  is  a  main  part 
of  the  argument.  He  there  says,  where  money  is  paid  under  a  mistake 
either  of  fact  or  of  law  or  by  deceit,  this  action  will  certainly  lie.  It  seems 
to  me  a  most  dangerous  doctrine,  that  a  man  getting  possession  of  money,  to 
any  extent,  in  consequence  of  another  party's  ignorance  of  the  law,  cannot 
be  called  on  to  repay  it.  Suppose  an  administrator  pays  money  per  capita 
in  misapplication  of  the  effects  of  the  intestate,  shall  it  be  said  that  he 
cannot  recover  it  back  1  It  is  said,  that  may  be  remedied  in  equity:  this 
is  an  cqiiital)le  action,  and  it  would  be  of  bad  effect  if  it  should  not  prevail 
in  like  cases.  In  the  case  of  Bize  v.  Dickason,  Lord  Mansfielo  held,  that 
if  a  person  has  i)aid  tiiat  which  in  conscience  he  ought,  but  the  payment 
of  which  could  not  be  compelled,  it  shall  not  bo  recovered  back  in  an  actioit 
for  money  liad  and  received,  but  that  where  a  man  has  paid  money  luider 
a  mistake,  which  he  wiis  neither  bound  in  law  nor  called  on.  in.  coiuicleniC» 

>  1  B1.  R.  219. 


86  BRISBANE   V.   DACRES.  [CHAP.  II. 

to  pay,  he  may  recover  it  back.  ISTow  the  case  against  the  plaintiff  is  not 
so  strong  as  it  has  been  stated.  I  do  not  find  in  the  case  that  any  demand 
was  ever  made  of  him,  or  any  question  mooted,  upon  which  he  thought  it 
better  to  submit  than  to  htigate  the  point.  No  option  ever  presented 
itself  to  him,  and  the  maxim  volenti  non  fit  injuria  does  not  apply.  It 
appears  to  me  that  the  justice  of  the  case  with  respect  to  the  freight  of 
the  public  treasure  is  entirely  with  the  plaintiff.  As  to  the  insurance  cases 
that  have  been  cited,  a  great  deal  of  fabricated  law  has  been  newly  created 
within  a  few  years,  and  the  courts  have  to  decide  on  difficult  and  complex 
cases ;  but  those  doctrines  must  not  be  carried  into  the  general  law,  but 
confined  to  the  occasions  which  give  rise  to  them.  I  therefore  think  the 
plaintiff  may  recover  as  to  the  20/. 

Heath,  J.  There  are  two  questions  in  this  case.  As  to  the  question 
whether  a  payment  made  under  ignorance  of  the  law  without  ignorance  of 
the  facts  will  enable  a  man  to  recover  his  money  back  again,  it  is  very 
difficult  to  say  that  there  is  any  evidence  of  ignorance  of  the  law  here  ;  an 
officer  is  sent  on  a  profitable  service,  the  admirals  are  in  the  habit  of 
receiving  a  proportion  of  the  officer's  recompense,  and  it  is  very  likely  the 
officer  should  acquiesce  in  the  demand.  He  might  not  like  to  contest  the 
point  with  his  superior  officer.  I  think  a  payment  made  with  knowledge 
that  a  request  would  be  made,  is  not  distinguishable  from  the  case  of  an 
actual  demand.  Now  if  money  be  received  without  expressing  the  use  to 
which  it  is  paid,  it  is  received  to  the  use  of  the  payer ;  but  when  it  is 
expressed  to  what  use  it  is  paid,  that  presumption  does  not  arise ;  here 
the  use  was  distinctly  expressed.  ^Moses  v.  Macfarlan  has  pi'operly  been 
questioned  in  many  cases,  and  particularly  by  Eyre,  C.  J.,  and  in  Marriott 
V.  Hampton,^  in  which  the  plaintiff  sought  to  recover  back  the  amount  of 
a  debt  recovered  by  law  from  him,  whereas  he  had  paid  it  before ;  but  it 
was  held  that  the  action  was  not  maintainable.  That  was  the  case  of 
judicium  redditum  in  invitum,  but  this  is  a  stronger  case;  for  the  plaintiff 
is  a  judge  in  his  own  cause,  and  decides  against  himself;  and  he  cannot  be 
heard  to  repeal  his  own  judgment.  Lord  Eldon,  Chancellor,  in  Bromley 
V.  Holland,^  approves  Lord  Kenyon's  doctrine,  and  calls  it  a  sound  princi- 
ple that  a  payment  voluntarily  made  is  not  to  be  recovered  back.  The 
plaintiff  ought  not  to  recover. 

Mansfield,  C.  J.  I  think  in  this  case  the  plaintiff  ought  not  to  recover. 
If  it  was  against  his  conscience  to  retain  this  money,  according  to  the  doctrine 
of  Lord  Kenyox,  an  action  might  be  maintained  to  recover  it  back,  but 
I  do  not  see  how  the  retaining  this  is  against  his  conscience ;  for  how  is  it 
claimed]  Before  1801,  the  captains  always  paid  freight  to  themselves 
both  for  private  and  public  treasure,  before  they  paid  over  the  residue  of 
the  dollars.  At  that  time  it  was  thought  proper  that  that  practice  should 
be  discontinued  so  far  as  related  to  the  freight  of  the  public  treasure ;  but 
1  7  T.  R,  269.  2  7  Ves.  23. 


SECT.  I.]  BRISBANE   I'.   D ACRES.  87 

in  order  to  make  captains  more  attentive  to  their  charge,  the  Treasury  and 
Adniiraltv  thought  it  would  be  proper  to  make  them  an  allowance,  and 
that  was  to  be  paid  to  the  captain  by  a  warrant  from  the  treasury  ;  but  so 
it  had  before  been,  when  the  captain  deducted  it,  that  was  paid  to  the 
captain,  and  before  that  a  practice  had  prevailed,  one  knows  not  how,  but 
probably  by  some  analogy  to  the  practice  of  prize-money,  that  the  flag 
officer,  when  only  one,  should  be  entitled  to  one-third ;  when  more  than 
one  flas  officer,  they  shared  it  in  certain  proportions.     In  the  order  which 
was  made  for  letting  them  thenceforth  be  paid  by  a  warrant,  instead  of 
deducting  the  freight  themselves,  nothing  is  said  about  any  allowance  to  be 
made  to  admirals ;  the  order  is  quite  silent  on  the  subject  of  what  the  cap- 
tain shall  do  with  the  freight  when  he  has  it,  but  the  officers  of  the  navy 
all  thinking  that  they  were  to  proceed  as  they  before  did,  go  on,  the  one 
to  pay,  and  the  other  to  receive,  as  they  had  done  before  this  alteration, 
and  the  admirals  receive  their  share  as  before ;  the  admiral  and  captain 
each  thinking  that  their  rights  continue  as  befoi-e,  the  admiral,  that  he  has 
his  accustomed  riglit;  the  captain,  that  it  is  his  duty  to  pay  the  accus- 
tomed share,  the  one  pays  and  the  other  receives  it.     This  then  being  so, 
the  admiral  doing  no  more  than  all  admirals  do,  is  it  against  his  conscience 
for  him  to  retain  it]     I  find  nothing  contrary  to  (fquum  et  bomnn,  to  bring 
it  within  the  case  of  Moses  v.  Macfarlan,  in  his  retaining  it.     So  far  from 
its  being  contrary  to  cvqitum  et  bonum,  I  think  it  would  be  most  contrary 
to  ceqnum  et  bonum  if  he  were  obliged  to  repay  it  back.     For  see  how  it 
is !     If  the  sum  be  large,  it  probably  alters  the  habits  of  his  life ;  he  in- 
creases his  expenses,  he  has  spent  it  over  and  over  again ;  perhaps  he  cannot 
repay  it  at  all,  or  not  without  great  distress :  is  he  then,  five  years  and 
eleven  months  after,  to  be  called  on  to  repay  it  1     The  case  of  Farmer  v. 
Arundel  and  De  Grey's  maxim  there,  is  cited  ;  it  certainly  is  very  hard 
upon  a  judge,  if  a  rule  which  he  generally  lays  down  is  to  be  taken  up  and 
carried  to  its  full  extent.     This  is  sometimes  done  by  counsel,  who  have 
nothing  else  to  rely  on ;  but  great  caution  ought  to  be  used  by  the  court 
in  extending  such  maxims  to  cases  which  the  judge  who  uttered  them  never 
had  in  contemplation.     If  such  is  the  use  to  be  made  of  them,  I  ought  to 
be  ver}'  cautious  how  I  lay  down  general  maxims  from  this  bench.     In  the 
case  of  Bize  v.  Dickason,  the  money  ought  conscientiously  to  ;have  been 
repaid.     There  is  no  other  case  cited  as  an  authority  for  the  proposition. 
The  maxim  volenti  nonfit  injuria  applies  most  strongly  to  this  case.     Lowry 
V.  Bourdieu  was  the  case  of  a  gaming  policy.     A  bond  had  been  given  for 
securing  the  money  lent,  which  was  the  only  interest  intended  to  be  insured; 
if  the  plaintiff  could  have  recovered  on  the  policy,  he  might  have  recovered 
the  money  twice.     The  insurance  was  on  goods,  and  he  had  no  interest 
whatsoever  in  those  goods,  otherwise  than  that  if  the  goods  arrived  the 
owner  f)f  them  woidd  be  the  better  able  to  pay  his  debt.     Tiie  last  case  is 
Bilbie  v.  Liuidey.     Certainly  it  was  not  argued,  but  it  is  a  most  positive 


88  LIVESEY   V.  LIVESEY.  [CHAP.  IL 

decisi//n,  and  the  counsel  was  certainly  a  most  experienced  advocate  and 
not  disposed  to  abandon  tenable  points.  My  Brother  Chambre  put  the 
case  of  an  administrator  paying  away  the  assets  in  an  undue  course  of 
administration.  I  know  not  that  he  could  recover  back  money  so  paid  : 
certainly  if  he  could,  it  could  be  only  under  the  principle  of  aquum  et  bonum. 
There  being  therefore  no  case  which  has  been  argued  by  counsel,  wherein 
the  distinction  has  been  taken,  and  in  which  this  doctrine  has  been  held, 
and  as  we  do  not  feel  ourselves  called  upon  to  overrule  so  express  an 
authority  as  Bilbie  v.  Lumley,  I  am  of  opinion  that  the  defendant  is  entitled 
to  retain  this  money.  We  hear  nothing  of  what  is  become  of  the  assets 
in  this  case;  perhaps  they  may  be  applied  among  the  next  of  kin,  and  dissi- 
pated ;  but  what  would  be  the  situation  of  the  parties,  if,  at  the  end  of 
five  years  and  eleven  months,  they  could  be  called  on  to  refund  in  such  a 
case !     I  am  therefore  of  opinion  that  there  ought  to  be  judgment  for  tlie 

defendant. 

Judgment  for  the  defendant. 


LIVESEY  V.   LIVESEY. 
Before  Lord  Lyndhurst,  C,  October  30,  1827. 

[Reported  in  3  Russell,  287-1 

James  Worthingtox,  by  his  last  will,  devised  and  bequeathed  to  his 
wife,  Jane  Worthington,  all  his  estates,  real  and  personal,  "  subject  to  the 
following  trusts  and  conditions."  Then  the  will,  after  giving  some  direc- 
tions, which  it  is  not  material  to  mention,  proceeded  in  the  following 
words :  "  I  also  will  and  direct  that  my  wife  shall  pay  unto  each  of  my 
daughters,  Jane  and  Eliza,  200/.  annually,  by  two  equal  half-yearly 
payments,  out  of  the  interest  arising  from  my  fortune.  After  my  wife's 
death,  I  vest  my  property  in  trust,  not  already  disposed  of,  to  my  brother- 
in-law,  Mr.  John  Armstrong,  and  Mr.  William  Clark,  for  them  to  phxce  out 
at  interest  on  the  best  mortgage  securities  that  may  be  had,  or  in  the  pur- 
chase of  an  estate  or  estates,  with  the  consent  of  my  daughters ;  and  that 
my  said  daughters  shall  receive  the  annual  interest  or  profits,  share  and 
share  alike,  which  shall  not  be  subject  to  the  control  or  debts  of  their 
husbands,  but  to  their  receipts  only.  And  my  will  and  mind  is,  that  my 
trustees  shall  pay  to  and  apply  for  the  benefit  of  my  grandson,  Edmund 
Worthington  Livesey,  the  sum  of  200Z.  annually,  when  he  attains  the  age  of 
twenty-one  years,  and  before  that  period  such  part  as  may  be  judged  proper 
out  of  the  200/.  bequeathed  to  him,  so  as  to  give  him  a  good  education ; 
being  desirous  that  he  may  be  brought  up  in  a  judicious  manner,  to  give 
him  a  degree  of  respectability  in  society  equal  to  his  family  and  fortime, 
which  have  always  supported  honorable  and  useful  characters  in  life.    As  to 


SECT.  I.]  LIYESEY   V.   LIVESEY.  89 

the  principal,  my  mind  is,  that  my  said  daughters,  Jane  and  Eliza,  shall 
have  full  power  to  dispose  of  it  in  such  proportions  aa  they  by  will  sluiU 
direct,  to  tlieir  chiMren  or  grandchildren  respectively,  except  that  propor- 
tion of  principal  given  to  Eliza,  and  from  which  the  interest  is  to  arise  to 
my  grandson,  viz.,  4000/.,  which  sum  shall  be  my  grandson's  property ;  but 
in  c:\se  either  of  them  should  die  without  having  lawful  issue,  then  my  will 
is,  that  the  fortune  of  her  so  dying  shall  revert  to  and  become  the  property 
of  the  surviving  one,  her  children,  or  grandchildren,  to  bo  disposed  of  to 
them  in  such  proportions  as  the  one  departing  this  life  shall  will  and  di- 
rect ;  and  she  shall  also  have  the  power  of  bequeathing  unto  her  husband, 
provided  she  leaves  one,  100/.  per  annum  as  an  annuity,  to  be  issuing  from 
and  out  of  the  moiety  so  disposed  of;  which  moiety  is  to  be  subject  to  the 
restriction,  limitation,  and  distribution  aforesaid." 

The  testator  died  in  1800,  leaving  his  widow  and  his  two  daughters,  Jane 
and  Eliza,  him  surviving.  The  widow  died  in  July,  1815.  Edmund  Wor- 
thington  Livesey,  who  was  the  eldest  son  of  Eliza,  attained  his  full  age  in 
August,  1817,  up  to  which  time  no  part  of  the  testator's  estate  had  been 
applied  towards  his  maintenance  or  education. 

In  November,  1817,  a  bill  was  filed  by  Jane  Livesey,  the  daughter  and 
personal  representative  of  the  testator,  and  by  her  husband,  in  order  to 
have  the  rights  of  the  parties  under  the  will  declared. 

Edmund  Worthington  Livesey  insisted  by  his  answer,  that  he  was  en- 
titled to  the  annuity  of  200/.  from  the  time  of  the  testator's  death,  and 
that,  on  his  attaining  twenty-one,  the  testator's  widow  being  then  dead,  the 
4000/.  became  payable  to  him. 

The  other  defendants  submitted,  that  the  annuity  did  not  commence  till 
Edmund  Worthington  Livesey  attained  the  age  of  twenty-one,  or,  at  all 
events,  till  the  death  of  the  testator's  widow. 

On  the  19th  of  November,  1821,  the  cause  was  heard  before  the  Master 
of  the  Rolls,  and  a  decree  was  pronounced. 

The  plaintiffs,  conceiving  that  Edmimd  Worthington  Livesey  was  entitled 
to  the  annuity  for  the  two  years  which  elapsed  between  the  death  of  tlie 
testator's  widow  and  his  attaining  the  age  of  twenty-one,  had  paid  it  to 
him,  and  had  deducted  400/.  out  of  that  moiety  of  the  interest  which  was 
payable  to  Eliza.  At  the  hearing,  however,  the  Master  of  the  Rolls  declared 
it  to  be  his  opinion,  that  the  annuity  did  not  commence  till  Edmimd  at- 
tained twenty-one  ;  and,  upon  this,  Eliza,  after  judgment  was  pn^iounced, 
but  befcjro  the  decree  was  drawn  up,  presented  a  petition,  praying  that  a 
direction  might  be  added  for  the  payment  to  her  of  the  400/.,  which  had 
been  thus  withheld.' 

On  the  5th  of  July,  1822,  the  jilaintifis  presented  a  petition,  stating, 
that  after  ICdmund  attained  his  full  age  they  had  paid  over  to  him  the 

'  So  much  of  the  ntatcment  of  facts  as  relates  to  the  terms  of  the  decree  has  been 
omitted.  —  Ku. 


90  LIVESEY   V.   LIVESEY.  [CHAP.  II. 

400Z.,  which  had  been  retained  oiit  of  Eliza's  share  of  the  interest,  in  order 
to  satisfy  the  annuity  for  the  two  years  which  intervened  between  the  death 
of  the  testator's  widow  and  the  termination  of  Edmund's  minority.  It 
prayed  that  a  direction  might  be  added  to  the  decree,  to  enable  them  to 
retain  the  400/.  out  of  the  growing  payments  of  Edmund's  annuity.  Before 
the  petition  was  heard,  the  decree  was  drawn  up.  But  by  an  order,  bearing 
date  on  the  29th  of  July,  1822,  the  Master  of  the  Rolls  directed,  that  the 
plaintiffs  should  be  at  liberty  to  deduct  out  of  the  future  payments  of  the 
annuity  such  sums  as  they  had  paid  in  respect  of  the  anuuity  before  Ed- 
mund attained  the  age  of  twenty-one  years. 

From  this  order,  and  also  from  the  decree,  Edmund  Worthington  Livesey 
appealed.  The  petition  of  appeal  insisted,  that  the  court  ought  to  have 
declared  that  he  was  entitled  to  the  annuity  of  200/.,  or  the  sum  of  200/. 
per  annum,  as  the  interest  of  the  4000/.,  from  the  death  of  the  testator,  or 
at  least  from  the  death  of  the  widow,  Jane  Worthington,  till  the  payment 
of  the  4000/. ;  and  that  the  4000/.  ought  to  have  been  ordered  to  be  paid 
to  him,  or  at  least  that  there  ought  to  have  been  a  declaration  that  he  took 
a  vested  interest  in  that  sum,  and  that  it  should  be  paid  to  him,  his  execu- 
tors, administrators,  or  assigns,  upon  the  death  of  his  mother,  Eliza  Livesey. 

Mr.  Shadwell,  Mr.  Preston,  and  Mr.  Duckworth,  for  the  appeUant. 

Supposing  that  payment  of  the  200/.  was  not  to  commence,  according 
to  the  true  construction  of  the  will,  till  Edmund  was  twenty-one  years  of 
age,  yet  tlie  executrix  cannot  recover  back  from  him  the  400/.,  which 
she  paid  to  him  in  respect  of  the  annuity  for  the  two  years  immediately 
preceding  his  attainment  of  his  full  age  :  for  those  payments  were  made 
■with  perfect  knowledge  of  the  facts ;  and  if  there  was  any  mistake,  it  was, 
at  the  utmost,  merely  a  mistake  in  point  of  law.  Brisbane  v.  Dacres;^ 
Skyring  v.  Greenwood.^  Even  if  those  payments  could  be  recovered  back, 
they  would  constitute  merely  an  ordinary  dclit  owing  by  Edmund  to  the 
executrix  ;  and  on  no  principle  can  they  be  considered  as  a  charge  on  the 
future  growing  payments  of  the  annuity. 

Sir  Charles  Wetherell  and  Mr.  Bickersteth  for  the  children  of  the 
plaintiff's. 

Mr.  Iloriie  and  Mr.  Wray  for  the  plaintiffs. 

The  Lord  Chancellor.  With  respect  to  the  order  upon  the  petition,'  it 
appears,  that  after  the  commencement  of  the  suit  the  annuity  was  paid  to 
Edmund  Worthington  Livesey  for  two  years,  the  period  which  elapsed  from 
the  death  of  Jane  Worthington  to  his  attaining  the  age  of  twenty-one.  The 
payment  was  made  upon  an  erroneous  supposition  that  he  was  entitled  to 
it ;  and  an  equal  amount  was  deducted  from  the  moiety  of  the  interest  pay- 
able to  Eliza  Livesey  under  the  will.  After  the  Master  of  the  Rolls  had 
given  judgment  in  the  cause,  but  before  the  decree  was  drawn  up,  a  petition 

1  5  Taunt.  143.  M  B.  &  C.  28L 

8  Only  so  much  of  the  opinion  is  given  as  relates  to  this  question.  —  Ed. 


SECT.  I.]  M'CARTHY   V.   DECAIX.  91 

was  presented  by  Eliza  Livesey,  praying  that  the  sum,  which  had  been  so 
deducted  from  her  moietv  of  the  interest,  might  be  directed  to  be  paid  to  her; 
and  this  was  ordered  accordingly  in  the  decree.  A  petition  was  then  pre- 
sented on  the  part  of  Jane  Livesey  the  executrix,  submitting  that  she  was 
entitled  to  be  repaid  this  sum,  and  praying  that  she  might  be  allowed  to 
retain  it  out  of  the  future  instalments  of  the  annuity  payable  to  Edmund 
"Worth ington  Livesey.  An  order  was  made  upon  this  petition,  after  the 
decree  was  passed. 

It  was  contended  that  this  was  irregular,  and  that  the  court  had  no 
jurisdiction  to  make  the  order.  There  can  be  no  doubt  tliat  this  money 
ought  to  be  repaid  ;  and  the  only  question,  therefore,  is,  Whether  the  Mas- 
ter of  the  Rolls  was  justified,  in  point  of  form,  in  making  the  order  in  ques- 
tion? This  order,  made  upon  the  petition  of  Jane  Livesey,  does  not  vary 
the  decree.  The  decree  merely  declares  the  rights  of  the  parties  under  the 
will,  with  the  exception  of  the  direction  as  to  the  payment  to  Eliza  Livesey. 
The  order  does  not  make  any  alteration  in  these  particulars.  It  is  an  order 
consequent  upon  that  declaration.  There  is  no  dispute  as  to  the  facts. 
Edmimd  Worthington  Livesey  had  been  paid  a  sum  of  money  on  account 
of  the  bequest  made  to  him  by  James  Worthington.  The  bequest  was  sup- 
posed to  be  more  extensive  than  it  has  since  proved.  The  construction  of 
tlie  will  was  misapprehended.  The  order  then  merely  directs  that  such 
sum,  so  paid,  shall  be  considered  in  account  with  the  executrix,  and  taken 
as  a  part-payment  of  the  bequest  as  now  ascertained.  Such  is  the  effect  of 
the  order.  I  think,  therefore,  that  it  not  only  is  in  substance  just,  as  be- 
tween those  parties,  but  that  it  is  not  incorrect  in  point  of  form. 

The  appeal  must  consequently  be  dismissed.^ 


M'CARTHY   V.   DECAIX. 

In  Chancery,  before  Lord  BROUonAM,  C,  May  9,  183L 

[Reported  in  2  Russell  and  Mylnc,  614.] 

This  was  a  suit  instituted  by  the  personal  representative  of  Robert 
Tuite,  deceased,  against  the  personal  representative  of  his  wife,  also  de- 
ceased, for  tlie  i)urp()se  of  recovering  the  arrears  of  an  annuity,  to  which, 
upon  the  death  of  the  wife,  and  in  default  of  her  appointment,  Mr.  Tuite, 
as  administrator  of  his  wife,  had  become  entitled,  by  virtue  of  a  settlement 
executed  on  their  marriage.  Mrs.  Tuite  died  in  the  month  of  February, 
1807  ;  her  husband  took  out  administration  to  her  estate  and  effects;  and 
in  the  niouth  of  December,  1811,  he  died. 

The  defence  set  up  was,  that  Mr.  Tuite,  soon  after  the  death  of  his  wife, 

>  (Jwif.  Hilli.inl  V.  Fiilfonl,  4  Cli.  D.  389.  —  En. 


92  m'carthy  v.  decaix.  [chap.  II. 

had  agreed  to  give  up,  and  had  actually  renouuced  all  claims  that  might 
accrue  to  him  under  the  settlement  or  in  his  marital  character,  for  the 
benefit  of  the  family  of  his  wife,  from  whom  the  settled  property  had  been 
derived. 

At  the  hearing  of  the  cause,  two  questions  were  principally  argued  :  first, 
■whether  the  dealings  and  correspondence  between  Mr.  Tuite  and  his  wife's 
relations,  in  the  years  1807  and  1808,  were  of  such  a  nature  as  to  amount 
to  an  absolute  renunciation  of  all  his  interest  in  their  favor;  and,  secondly, 
if  they  were,  whether  that  renunciation  was  made  at  a  time  when  Mr. 
Tuite  was  fully  apprised  of  the  extent  of  his  legal  rights,  as  the  surviving 
husband  and  the  administrator  of  his  wife,  and  of  the  amount  and  value  of 
her  property. 

At  the  hearing  of  the  cause  on  the  12th  of  December,  1821,  before  Sir 
John  Leach,  then  Vice-Chancellor,  his  Honor  referred  it  to  the  Master  to 
inquire  and  state  to  the  court,  whether  Robert  Tuite  died  in  the  intention 
of  renouncing  all  interest  in  his  wife's  property  in  favor  of  her  family,  and 
whether  before  his  death  he  was  apprised  of  the  circumstances  whicli  be- 
longed to  that  property,  and  of  the  amount  of  the  claim  made  in  respect 
of  the  annuity. 

The  plaintiff  appealed  against  that  decree.  The  petition  of  appeal  was 
originally  argued  before  Lord  Eldon  ;  but  his  Lordship  having  resigned 
the  Creat  Seal  before  disposing  of  the  case,  it  now  came  on  to  be  reheard. 

Sir  B.  Sugden  and  Mr.  R.  P.  Roiipell  for  the  plaintiff. 

Mr.  Treslove  and  Mr.  Stuart,  for  the  defendant. 

The  Lord  Chancellor.  This  was  a  case  of  considerable  difficulty,  long 
pending  in  tliis  court,  and  much  considered  by  Lord  Eldon,  who  went  out 
of  office  before  he  finally  decided  it  on  the  appeal.  The  observations  and 
notes  of  that  learned  iudge  upon  the  case,  with  which  notes  I  have  been 
furnished,  show  the  great  attention  he  gave  to  it,  and  the  difficulty  under 
which  he  labored  with  respect  to  the  facts ;  and  in  consequence  of  those 
difficulties,  it  has  received  the  greatest  attention  from  me,  and  I  have 
delayed  pronouncing  an  opinion  until  I  could  look  fully  into  the  matter. 

The  case  was  this:  —  A  person  of  the  name  of  Tuite  contracted  a  marriage 
in  this  country  with  an  Englishwoman,  —  the  marriage  being  solemnized 
in  England,  but  he  being  himself  a  Dane  by  birth,  fortune,  and  domicile. 
He  afterwards  removed  his  wife  from  this  country,  the  locus  contractus 
(with  which  he  appears  to  have  had  no  further  connection),  to  the  domin- 
ions of  the  King  of  Denmark,  where  his  subsequent  domicile  continued  to 
be  ;  and  in  that  kingdom  the  marriage  was  dissolved  by  a  valid  Danish 
divorce,  as  far  as  such  a  divorce  could  dissolve  it ;  but  which,  I  may  observe 
in  passing,  by  the  law  of  this  land  could  have  no  operation,  as  was  fully 
established  by  the  opinion  of  the  twelve  judges,  who  solemnly  decided, 
after  argument,  that  no  proceedings  in  a  foreign  court  could  operate  to  dis- 
solve or  affect  a  marriage  celebrated  in  England. 


SECT.  I.]  M'C-VTwTIIY   V.    DECAIX.  93 

During  the  lifetime  of  Mrs.  Tuite,  and  subsequently  to  the  divorce, 
certain  arrears  of  an  annuity  which  she  enjoyed  under  the  marriage  settle- 
ment accrued,  or  were  said  to  have  accrued,  amounting  at  her  death  to 
the  sum  of  £7000.  Prior  to  that  event,  a  litigation  in  this  court  had  been 
commenced,  to  which  the  claim  to  these  arrears  was  incident.  After  the 
decease  of  both  husband  and  wife,  the  result  of  the  suit  was  to  put  the 
party  representing  her  in  possession  of  those  arrears,  and  two  sums 
were  actually  recovered  and  paid  to  them,  amounting  in  the  whole  to 
£3G31  ;  and  the  whole  of  the  question  in  this  cause  arises  with  respect  to 
those  sums,  it  being  a  conflict  between  the  respective  personal  represen- 
t;itives  of  Mr.  and  Mrs.  Tuite,  upon  the  eflect  of  a  correspondence  between 
Mr.  Tuite  and  Mrs.  Delattre,  the  sister  of  Mrs.  Tuite,  and  her  legal  adviser 
Mr.  Pinegar. 

Upon  tliat  correspondence  the  whole  question  in  dispute  appears  to  turn. 
On  the  death  of  Mrs.  Tuite,  letters  are  written  by  Mrs.  Delattre  represent- 
ing her  to  have  died  in  very  poor  circumstances  ;  so  much  so  that  her  debts 
were  said  to  amount  to  more  than  all  the  little  property  she  left  could 
satisfy,  even  including  her  wearing  apparel.  Mr.  Tuite,  in  reply,  writes 
two  letters  to  Mrs.  Delattre,  and  in  answer  to  her  application  to  that  eflect ; 
he  at  first  refuses  to  execute  a  power  of  attorney  to  receive  any  funds  that 
may  become  due,  denying  his  riglit,  because  he  insists  it  was  a  good  divorce 
(nor  indeed  had  it  been  decided  till  Lolley's  case  in  1812-13,  that  a  for- 
eign divorce  was  of  no  effect  as  regards  an  English  marriage)  ;  and  he 
afterwards  says,  "  If  such  a  power  is  required,  I  would  not  have  anything  ; 
her  family  is  most  heartily  welcome  ;  "  and  his  language  in  anotlier  letter 
is,  "  I  claim  nothing.  I  would  accept  of  nothing ;  nevertheless,  in  case 
it  may  by  the  form  of  your  law  be  requisite,  I  give  Messrs.  S.  and  L.  a 
power  to  act  for  me."  How  entirely  he  relied  upon  the  marriage  as  being 
in  other  respects  at  an  end,  is  manifest  from  the  fact,  that  besides  giving 
up  tlie  claim  to  the  property  of  the  decea.sed  lady,  he  calls  her  by  the  name 
of  Mrs.  Trefusis,  which  was  the  name  she  bore  before  she  became  Iiis  wife. 

It  must,  therefore,  at  least  be  admitted  that  in  giving  this,  which  is 
called  his  renunciation,  the  husband  labored  under  two  capital  errors,  one  of 
law,  the  other  of  fact;  the  one  not  superinduced  by  any  suppression  of  cir- 
cumstances on  the  part  of  Mrs.  Delattre  and  her  agent;  whereas  the  other 
may  be  said  to  have  arisen  from  their  not  disclosing  facts,  which  there  is 
every  reason  to  believe  they  must  have  known,  — the  latter  an  eiToi-  which 
if  they  did  not  create,  they  had  at  least,  to  a  certain  degree,  a  share  in 
maintaining.* 

Thi3  then  is  a  very  inii^ortaiit  orror,  which  may  have  influenced  Mr.  Tuite 
in  making  this  renunciation.  Andean  I  iiold  a  party  to  be  bound  l)y  an  act 
or  dechiration  made  in  ignorance  of  so  material  a  fact?  AVas  it  not  a  most 
material  ingredient  in  farming  his  judgment  and  inlhicnciug  his  incbnationi 

'  A  pfjrtion  of  tho  ojiinion  discussing  LolU'y's  ca.sc  has  bct-ii  oiiiitli'd.  —  Kn. 


94  m'carthy  v.  decaix.  [chap.  ii. 

He  might  very  well  say,  "  I  am  no  longer  her  husband ;  I  give  up  all 
claim  to  her  property,"  when  he  supposed  the  connection  of  husband  no 
longer  to  subsist.  And  yet  if  he  had  been  told  that  he  was  still  her  hus- 
band ;  that  no  power  could  dissolve  the  marriage  ;  that  he  was  liable,  in 
his  person  and  property,  for  her  debts  ;  that  the  tribunals  of  his  own 
country  would  acknowledge  this  to  be  the  law  ;  that  as  he  undertook  the 
relation  cum  otiere,  so  also  he  was  beneficially  entitled  to  whatever  was  the 
property  of  his  wife,  be  it  small  or  great,  —  it  is  impossible  to  say  that  this 
knowledge  might  not  have  altered  his  intention  ;  for  if  a  man  does  an  act 
under  ignorance,  the  removal  of  which  might  have  made  him  come  to  a 
different  determination,  there  is  an  end  of  the  matter.  What  he  has  done 
was  done  in  ignorance  of  law,  possibly  of  fact ;  but  in  a  case  of  this  kind 
that  would  be  one  and  the  same  thing. 

These  considerations  do  not  appear  to  have  been  sufficiently  adverted  to 
in  the  court  below.  I  cannot  help  thinking,  besides,  that  taking  the  case 
at  the  lowest,  ISIr.  Tuite  and  Mrs.  Delattre  were,  at  the  time  of  the  sup- 
posed renunciation,  in  a  state  of  ignorance  as  to  some  other  most  material 
facts ;  and  it  is  impossible  to  say,  that  a  person  shall  be  held  to  what  he 
has  done  under  circumstances  which  have  been  so  erroneously  represented 
to  him,  however  innocently  the  representation  may  have  been  made.  Who 
can  venture  to  predict  what  might  have  been  Mr.  Tuite's  course  had  he 
known  how  the  facts  really  stood  ]  If  a  man,  separated  and  living  at  a 
distance  from  his  wife,  receives  a  letter  telling  him  that  she  is  on  her  death- 
bed, and  that  she  leaves  no  assets,  —  not  enough  to  pay  the  costs  of  her 
funeral ;  and  he  writes  in  reply,  "  I  shall  not  interfere ;  she  is  no  wife  of 
mine  ;  "  it  is  impossible  to  say  that  he  shall  be  bound  by  that  disclaimer, 
made  under  the  influence  of  a  common  error. 

Doubtless,  if  with  a  full  knowledge  that  the  wife's  property  might  be 
large  or  might  be  small,  he  distinctly  gave  up  all  title  to  it,  whatever 
might  turn  out  to  be  its  value,  his  disclaimer  would  be  good.  But  if  he 
entertained  a  bona  fide  belief  that  she  died  insolvent,  it  would  be  going  far 
to  say  that  his  renunciation  should  bind  him,  or  that  the  other  party  should 
have  a  right  to  hold  him  to  it.  In  Cocking  v.  Pratt  \  where  Sir  John  Strange 
had  to  deal  with  the  case  of  a  mother  contracting  with  her  daughter  as  to  her 
share  of  the  fiither's  personal  estate,  he  held  the  transaction  to  be  void,  on  the 
ground  that  the  mother  plainly  had  better  information  than  the  daughter. 
But  even  if  it  be  assumed  that  Mrs.  Delattre  knew  no  more  of  the  real 
fiicts  than  Mr.  Tuite,  Willan  v.  Willan  ^  is  an  authority  to  show  tliat  where 
both  parties  were  in  a  state  of  equal  ignorance  as  to  the  fiicts  respecting 
which  they  were  dealing,  the  transaction  will  not  be  supported. 

It  is  unnecessary  for  me,  however,  to  decide  as  to  the  law  on  this  point, 
because  when  the  evidence  is  narrowly  scrutinized,  the  circumstances  of 
the  transaction  relieve  the  case  from  all  difficulty,  showing  that  there  is 

1  1  Ves.  400.  2  16  Ves.  72. 


SECT.  I.]  DIBBS    V.   GOREN.  95 

every  reason  to  believe  that  the  wife's  relations,  living  in  England,  must 
have  known,  and  did,  in  point  of  fact,  know  a  great  deal  more  than  Mr. 
Tuite,  the  foreigner,  living  in  Santa  Cruz ;  and  bringing  the  case,  there- 
fore,  directly  witliin  the  principle  laid  down  by  Sir  Joun  Stuange  iu 
Cocking  V.  Pratt. 

[The  Lord  Cuancellor  then  entered  into  a  detailed  examination  of  the 
language  and  etfect  of  the  correspondence  between  the  parties,  and  ex- 
pressed his  opinion  that  the  conduct  and  letters  of  Mrs.  Uelattre  and  her 
airent  clearly  indicated  that  they  were  better  informed  as  to  the  state  of 
Mrs.  Tuite's  property  than  her  husband,  and  were  well  aware  it  was  not  of 
that  insolvent  description  which  had  been  represented.  His  Lordship  then 
continued  :  — ] 

On  the  whole,  it  is  sufficiently  established  that  when  Mr.  Tuite  agreed  to 
give  up  any  claim  to  his  wife's  fortune,  he  was  acting  under  a  misappre- 
hension in  two  most  material  particulars :  in  the  first  place,  he  believed 
that  Mrs.  Tuite  at  the  time  of  her  death  had  by  law  ceased  to  be  his 
wife,  an  impression  which  seems  to  have  been  the  mainspring  of  his  liber- 
ality ;  and,  secondly,  he  was  wholly  ignorant,  or  rather  he  was  positively 
misinformed,  with  respect  to  the  amount  and  value  of  her  property,  and 
his  ignorance  certainly  was  not  shared,  at  least  in  an  equal  degree,  by 
the  parties  with  whom  he  was  dealing. 

Upon  these  two  grounds  I  am  clearly  of  opinion  that  the  agreement, 
cannot  be  supported  as  a  valid  renunciation  by  Mr.  Tuite,  and  that  the 
judgment  of  the  court  below  must  be  reversed. 


DIBBS  V.   GOREN. 
In  Chancery,  before  Lord  Laxgdale,  M.  R.,  January  29,  1849. 

[Reported  in  11  Beavan,  483.] 

In  181.5,  the  testator  made  his  will,  giving  his  property  to  trustees  on 
certain  trusts  for  his  children  and  grandchildren.  He  died  in  1810,  and 
the  trustees,  acting  on  their  own  notion  of  the  effect  of  the  trusts,  pro- 
ceeded in  their  performance.  In  183G,  a  bill  was  fded  for  the  administra- 
tion, and  it  was  then  f(Anui  that  the  trustees  had  acted  under  an  erroneous 
view  of  the  effect  of  the  will;  and  it  was  so  declared  by  the  decree  made 
in  January,  1841. 

It  turned  out,  that  two  of  the  testator's  children,  Henrietta  and  John, 
had  each  received  from  the  trustees  a  sum  of  XI 11,  part  of  the  trust 
property,  to  which  they  were  not  entitled,  and  that  two  other  children, 
Charles  and  Robert,  had  also  received  £782,  to  which  they  were  not,  under 
the  will,  entitled. 


96  COOPER   V.   PHIBBS.  [CHAP.  II. 

These  chiklren  were  entitled  to  other  interests  imder  the  will. 

In  1828,  John  had  assigned  his  interest  under  the  will  to  Macdougal  for 
valuable  consideration. 

Mr.  Turner  and  Mr.  Chandless,  for  the  trustees. 

Mr.  Shadwdl,  Mr.  Kindersley,  Mr.  Goren,  Mr.  Roiipell,  Mr.  Bevir, 
Mr.    Wright,  and  Mr.   Giffard,  for  other  parties. 

Mr.  Sheffield,  for  Macdougal,  the  assignee  of  John. 

The  Master  of  the  Eolls.  The  trustees  seem  to  have  thought  it 
better  to  construe  this  will  themselves  than  to  incur  the  expense  of  coming 
to  the  court  for  its  assistance. 

Where  a  trustee  takes  on  himself  to  act  upon  his  own  authority,  and 
pays  to  the  parties  beneficially  interested  sums  to  which  they  ai'e  not  enti- 
tled, it  becomes  necessary  for  this  court  to  enforce  the  execution  of  the 
trust,  by  recovering  back  the  sum  thus  received  contrary  to  the  trusts. 
The  difficulty  has  arisen  from  the  trustees  acting  without  the  assistance  of 
the  court,  and  running  the  risk  of  error.  Unfortunately  they  have  made 
these  payments,  and,  by  their  act,  some  of  the  parties  have  received  a 
portion  of  the  estate  to  which  they  are  not  entitled.  I  cannot  allow  them 
to  retain  it. 

The  plaintiff  is  entitled  to  have  these  sums  deducted  from  the  shares  of 
John  and  his  assignee,  and  of  Henrietta  and  Charles,  with  a  declaration, 
that,  until  those  sums  have  been  recouped,  they  form  a  lien  on  the  other 
monies  which  may  become  due  to  them  under  the  will. 


EDWARD   H.   COOPER,  Appellant  v.  WILLIAM   PHIBBS, 
CHARLOTTE  S.   COOPER,  and  Others,  Respondents. 

In  the  House  of  Lords,  May  31,  18G7. 

[Reported  in  Law  Reports,  2  English  ^  Irish  Appeals,  149] 

This  was  an  appeal  against  a  decretal  order  of  the  Lord  Chancellor  of 
Ireland,  dated  14th  of  June,  1865,  and  made  under  the  following  circum- 
stances :  — 

By  deed  of  the  12th  of  May,  1806,  Sir  Edward  Crofton,  for  the  considera- 
tions therein  mentioned,  conveyed  the  lands  of  Ballysadare  in  the  county 
of  Sligo,  with  tolls  and  customs  of  markets,  etc.,  and  the  salmon  fishery, 
and  all  other  the  fisheries  of  the  river  of  Ballysadare,  situate  in  the  same 
county,  to  Joshua  Edward  Cooper  in  fee. 

Shortly  after  this  conveyance  had  been  executed,  Joshua  Edward  Cooper 
(who  was  unmarried)  was  declared  a  lunatic,  and  Edward  Synge  Cooper, 
his  only  brother,  and  his  presumptive  heir,  was  appointed  committee  of  his 


SECT.  I.]  COOPER  V.    PHIBBS.  97 

estates.  His  estate  in  the  county  of  Sllgo  was  called  the  Markree  estate. 
Rlward  Synge  Cooper  had  two  sons,  Edward  Joshua  Cooper  and  Ricliard 
Wordsworth  Cooper ;  Edward  Joshua  had  been  once  married,  but  had  no 
child  by  that  marriage.  On  the  13th  of  February,  1827,  a  deed  of  settle- 
ment was  executed  on  his  intended  marriage  with  Miss  Wynne,  and  to  that 
settlement  his  father,  Edward  Synge  Cooper,  and  his  brother,  Richard 
"Wordsworth  Cooper,  became  parties.  Under  that  settlement  Edward 
Synge  Cooper  covenanted  that  if  the  lunatic  should  die  intestate  and  with- 
out issue,  and  should  be  at  the  time  of  his  death  seised  in  fee  "of  or  in  the 
said  several  towns,  lands,  tenements,  or  hereditaments  in  the  county  of 
Sligo,"  etc.,  "  thereinbefore  and  thereinafter  particularly  enumerated  and 
described;"  or  if  at  any  time  after  the  decease  of  the  lunatic,  he,  Edward 
Synge  Cooper,  should  happen  to  be  seised  of  any  freehold  estate  "  in  the 
said  several  last-mentioned  lands,  tenements,  and  hereditaments,  by  any 
title  derived  by,  through,  or  under  "  the  lunatic,  he,  Edward  Synge  Cooper, 
Avould,  within  six  months  after  the  lunatic's  death,  convey  to  trustees  "  all 
tliat  and  those  the  town  and  lands  of  Ballysadare,  and  all  the  tenements, 
houses,  and  plots  therein,  together  with  the  tolls  and  customs  of  the  fairs 
and  markets  therein,  .  .  .  and  all  other  estates  of  inheritance  whereof  the 
said  [lunatic]  shall  die  seised  or  possessed,  or  such,  and  so  many,  and  all 
such  parts  of  the  same  as  shall  have  descended,  remained,  or  vested  in  the 
said  Edward  Synge  Cooper  as  tenant  in  fee  simple  or  fee  tail  in  possession 
thereof,  in  any  of  the  manners  or  ways  aforesaid,  together  with  their  sev- 
eral sub-denominations  and  appurtenances,  and  also  all  houses,  wastes, 
common,  common  of  pasture,  waters,  watercourses,  easement,  liberties, 
privileges,  profits,  appurtenances,"  etc.,  to  himself  for  life,  remainder 
to  his  son  Edward  Joshua  for  life,  remainder  to  his  issue  male  in  strict  set- 
tlement, remainder  to  his  other  son,  Richard  Wordsworth  Cooper,  for  life, 
remainder  to  his  issue  male  in  strict  settlement.  The  word  "  fishery"  did 
not  occur  in  the  settlement.  There  was  a  similar  covenant  on  the  part  of 
Edward  Joshua  Cooper  and  of  Richard  Wordsworth  Cooper  that  if  the  said 
estate  should  descend  to  or  vest  in  them,  or  either  of  them,  from  the  luna- 
tic, they  or  either  of  them  would  convey  the  same  to  the  uses  specified  in 
the  covenant  of  their  father,  Edward  Synge  Cooper.  In  August,  1830, 
Edward  Synge  Cooper  died,  leaving  his  elder  brother,  the  lunatic,  and  his 
own  two  sons,  Ivlward  Joshua  and  Richard  Wordsworth,  him  surviving. 
PMward  Joshua  from  that  time  acted  as  committee  of  the  lunatic.  lu  the 
early  part  of  1837  a  petition  for  a  bill  had  been  presented  to  Parliament, 
by  Edward  Joshua  as  committee,  to  give  the  lunatic  powers  to  improve  tlie 
fishery  ;  but  while  it  was  passing  through  Parliament  the  lunatic  died,  ond 
then  in  the  various  clauses  the  necessary  changes  were  made  by  introdu- 
cing the  name  of  Kdward  Joshua,  who  had  succeeded  to  the  property.  The 
Act,  which  was  known  as  the  1  Vict,  c.  Ixxxix.,  recited  that  the  "rivers 
Arrow  and  Owcnmorc  rise  from  two  large  lakes  in  different  parts  of  the 

1 


88  COOPER  V.    PHIBBS.  [CHAP.  IL 

county  of  Sligo,  and,  after  flowing  through  a  large  tract  of  country,  unite 
their  streams  at  about  a  mile  above  the  town  of  Ballysadare,  whence  they 
flow  into  the  same  channel  to  the  bay  of  Ballysadare,  where,  by  one  mouth 
they  discharge  their  waters  into  the  bay,"  and  then  it  described  how  the 
flow  of  their  waters  was  interrupted  by  ledges  of  rocks,  which  prevented 
salmon  getting  up  the  river  ;  and  it  recited  the  conveyance  by  Sir  Edward 
Crcfton  to  the  lunatic,  "  and  his  heirs,  and  assigns  for  ever,"  of  the  whole 
eastern  bank  of  the  river,  "together  with  the  salmon  fishery,  and  all  other 
the  fisheries  of  the  river,"  possessed  by  Sir  Edward  Crofton;  that  the  luna- 
tic after  the  conveyance,  and  up  to  the  time  of  his  death,  "did  uninter- 
ruptedly exercise  and  enjoy  the  exclusive  right  of  taking  the  salmon  which 
so  as  aforesaid  annually  congregate  within  the  mouth  of  the  said  united 
rivers;"  that  the  lunatic  died  in  June,  1837,  "whereby  all  the  aforesaid 
estates,  towns,  lands,  and  fishery,  have  descended  to  and  are  now  vested 
in  the  said  Edward  Joshua  Cooper,  who  is  the  nephew  and  heir-at-law  of" 
the  lunatic ;  that  "  the  said  Edward  Joshua  Cooper  is  desirous  of  con- 
structing canals  or  water  cuts  at  his  own  expense  "  in  consideration  of  the 
exclusive  right  of  fishery  being  vested  in  him,  his  heirs,  and  assigns,  —  and 
it  was  therefore  enacted  that  the  powers  to  make  the  cuts  and  canals,  etc., 
should  be  granted  to  him,  provided  that  the  cuts  "shall  be  altogether  sit- 
uated on  the  estate  and  property  of  the  said  Edward  Joshua  Cooper,"  etc. 
There  were  various  other  provisions,  in  all  of  which  Edward  Joshua  Cooper 
was  spoken  of  as  the  owner  of  the  estate,  and  the  title  of  the  Act,  as  al- 
tered after  the  death  of  the  lunatic,  was,  "An  Act  to  enable  Edward  Joshua 
Cooper,  Esq.,  to  establish  and  protect  a  Salmon  Fishery  upon  the  Lakes 
and  Rivers  of  Owenmore  and  Arrow,  and  also  within  the  Bay  of  Ballysa- 
dare, in  the  County  of  Sligo." 

Edward  Joshua  Cooper  constructed  the  canals  and  cuts,  and  improved 
the  salmon  fishery,  as  provided  for  by  this  Act,  and  he  continued  in  posses- 
sion thereof,  and  of  the  estates  to  which  he  had  succeeded,  until  his  death. 

By  his  second  marriage  he  had  five  daughters  but  no  son. 

Richard  Wordsworth  Cooper  had  also  married,  and  he  died  in  1850,  leav- 
ing the  appellant  his  eldest  son  and  heir-at-law. 

In  1858  the  appellant  married,  and  on  the  8th  of  August,  1858,  a  dis- 
entailing deed,  and  then  a  settlement,  of  the  Sligo  estates,  were  executed 
by  Edward  Joshua  Cooper,  the  estates  being  settled  as  subject  to  the  uses 
of  the  settlement  of  1827. 

During  the  life  of  Edward  Joshua  Cooper,  he,  apparently  believing  that 
the  Act  1  Vict.  c.  Ixxxix.,  vested  the  fee  simple  of  the  fishery  in  him,  dis- 
charged from  the  limitations  of  the  settlement  of  1827,  always  spoke  of 
himself  as  the  absolute  owner  of  the  fishery,  and,  as  alleged  in  the  cause 
petition  of  the  appellant,  always  assumed  such  to  be  the  fact. 

In  September,  1858,  the  appellant  joined  with  Edward  Joshua  Cooper  in 
a  lease,  renewable  for  ever,  of  two  and  a  half  acres  of  land  adjoining  the 


SECT.  l]  COOPER   V.    PHIBBS.  99 

fishery,  which  lease  was  granted  to  a  Mr.  Leech,  as  trustee  for  Edward 
Joshua  Cooper,  wlio  afterwards  built  on  this  land  a  messuage  known  as  the 
Rapids  Cottage,  with  a  coach  house,  and  other  premises. 

in  April,  18G3,  Edward  Joshua  Cooper  died  intestate,  leaving  his  five 
daughters  (but  no  male  issue)  him  surviving.  On  his  death  the  appellant 
entered  into  possession  of  the  estates,  and  on  the  14th  of  October,  1863, 
there  was  executed  between  him  and  Phibbs,  who,  under  the  settlement 
upon  Edward  Joshua's  second  marriage,  acted  as  trustee  for  the  daughters, 
an  agreement  for  a  lease,  which  the  appellant  now  sought  to  cancel.  It 
was  iu  the  following  terms  :  "  W.  Phibbs  agrees  to  let,  and  Colonel  Ed- 
ward Cooper  agrees  to  take,  for  a  term  of  three  years,  to  be  computed  from 
the  1st  day  of  November  next,  the  salmon  fishery  at  Ballysadare,  county 
Sligo,  together  with  the  Rapids  Cottage,  coach-house,  and  gate-house,  at 
the  yearly  rent  of  £550  sterling,  said  rent  to  be  payable  half  yearly,  on 
every  1st  day  of  May  and  1st  day  of  November  iu  each  year.  The  said 
Edward  Cooper  shall,  during  the  tenancy,  keep  proper  books,  showing  the 
receipts  and  expenditure  of  said  fishery,  and  weights  in  pounds  of  number 
of  fish  taken,"  and  shall  allow  Phibbs  to  inspect  the  books,  and  to  have 
free  access  to  the  fishery. 

Before  the  first  half  year's  payment  became  due,  the  appellant  purchased 
and  read  tlie  Act  of  Parliament,  1  Vict.  c.  Ixxxix.,  and  then,  believing  that 
it  had  not  the  effect  which  had  always  been  attributed  to  it,  he  filed  his 
cause  petition,  in  the  Court  of  Chancery  in  Ireland,  to  have  the  agreement 
set  aside.  To  this  cause  petition  Mr,  Phibbs,  and  the  five  daughters  of  Ed- 
ward Joshua  Cooper,  were  made  defendants,  and  the  prayer  was,  that  the 
agreement  of  the  14th  of  October,  18G3,  might  be  delivered  up  to  be  can- 
celled, and  tlie  defendant,  Mr.  Phibbs,  perpetually  restrained  from  suing 
upon  the  same,  the  petitioner  submitting  to  any  terms  Vhich  the  court 
might  impose  as  the  condition  for  granting  the  said  relief,  and  (after  nam- 
ing the  defendants)  asking  for  such  farther  relief  as  "  the  nature  of  the 
case  would  admit  of,  and  as  to  the  court  might  seem  fit." 

Alfidavits  in  answer  were  put  in,  and  witnesses  examined,  and  the  cause 
was  heard  bcloru  the  Lord  Chancellor  of  Ireland,  who,  on  the  14th  of  June, 
18G5,  made  a  decretal  order  dismissing  the  petition  with  costs,  but  without 
prejudice  to  any  question  as  to  the  ultimate  right  to  the  fishery.* 

•  17  Ir.  <'h.  Hij).  73.  In  the  conrsp  of  his  judj^ciit  the  Lord  Chancellor  said:  "The 
olyoct  of  this  c.tiisc  ixlitimi  is  to  relieve  Edward  Henry  Cooper  from  the  coiise(]iience8 
of  an  act  done  by  him  wliilc  in  ignorance  of  his  true  [Kwition  witli  respect  to  tliis  fisliery, 
dono  by  him  in  demj^ntion  of  his  rij^lils  while  acting  under  the  iiiHiience  of  a  mistake. 
.  .  .  No  douJtt,  a  iiiisUike  in  jioint  of  law  riiny  be  corrected  l)otli  in  tliis  court  and  in  a 
court  of  law.  Tiiis  is  now  |i(;rliaps  siiflicienlly  establislied,  though  it  was  for  some  time 
a  subject  of  controversy  in  courts  of  law;  "  but  his  Lordsliip  remarked  tliat  this  power  of 
correction  woidd  not  be  exi'icised  except  where  ecpiity  and  pood  conscience  re(iuircd  it, 
and  his  I/ordslii|i  finally  came  to  the  conclusion,  that  no  valid  ground  for  relief  was  ea- 
tablished  in  this  case. 


100  COOPER   V.    PHIBBS.  [CHAP.  II. 

The  Attorney-General  (Sir  Joh7i  Rolt),  and  Mr.  G.  M.  Giffard,  Q.  C.  (Mr. 
Fetherston  H.  was  with  them),  for  the  appellant. 

Mr.  Lau'son,  Q.  C.  (of  the  Irish  Bar),  and  Sir  Roundell  Palmer,  Q.  C,  for 
the  respondents. 

May  31.  Lord  Cranworth  :  —  My  Lords,  this  is  an  appeal  against  a  de- 
cree of  the  Lord  Chancellor  of  Ireland,  of  the  14th  of  June,  18G5,  dismiss- 
ing a  cause  petition  which  had  been  filed  by  the  appellant  on  the  9th  of 
April,  18G4,  pursuant  to  the  Chancery  Regulation  Act  of  1850.  The 
object  of  the  petition  was  to  be  relieved  from  an  agreement,  dated  on  the 
14th  of  October,  18G3,  by  which  the  petitioner  agreed  to  become  tenant  to 
the  respondent  Phibbs,  for  three  years,  of  the  salmon  fishery  of  Ballysadare, 
in  the  county  of  Sligo.  The  ground  of  the  relief  asked  was,  that  the  pe- 
titioner had  entered  into  an  agreement  in  mistake  as  to  his  rights.  He 
thought  that  the  fishery  belonged  to  the  other  respondents,  for  whom 
Phibbs  acted  as  trustee ;  but  he  was  in  truth  himself  the  owner  of  the 
fishery  as  tenant  thereof  in  tail.'' 

The  consequence  was,  that  the  present  appellant,  Avhen,  after  the  death 
of  his  uncle,  he  entered  into  the  agreement  to  take  a  lease  of  this  property, 
entered  into  an  agi'eement  to  take  a  lease  of  what  was,  in  truth,  his  own 
property,  —  for,  in  truth,  this  fishery  was  bound  by  the  covenant,  and  be- 
longed to  him,  just  as  much  as  did  the  lands  of  Ballj-sadare  ;  therefore,  he 
says,  I  entered  into  the  agreement  under  a  common  mistake,  and  I  am 
entitled  to  be  relieved  from  tlie  consequence  of  it. 

In  support  of  that  proposition  he  relied  upon  a  case  which  was  decided 
in  the  time  of  Lord  Hardwicke,  not  by  Lord  Hardwicke  himself,  but  by 
the  then  Master  of  the  Rolls,  Bingham  v.  Bingham,^  where  that  relief  was 
expressly  administered.  I  believe  that  the  doctrine  there  acted  upon  was 
perfectly  correct*  doctrine ;  but  even  if  it  had  not  been,  that  will  not  at  all 
shew  that  this  appellant  is  not  entitled  to  this  relief,  because  in  this  case 
the  appellant  was  led  into  the  mistake  by  the  misinformation  given  to  him 
by  his  uncle,  who  is  now  represented  by  the  respondents.'     It  is  stated  by 

1  So  ranch  of  the  opinion  as  relates  to  the  question  of  title  has  been  omitted.  —  Ed. 

2  1  Ves.  127. 

3  Snell  V.  Insurance  Co.,  98  U.  S.  85  ;  Jordan  r.  Stevens,  .^1  Me.  78  ;  Martin  v.  R. 
R.  Co.,  36  N.  J.  Eq.  109,  accord. 

If  the  mistake  of  law,  or  as  to  his  private  right,  be  that  of  one  party  only  to  a  trans- 
action, it  may  be  either  that  the  mistake  was  induced  or  encouraged  by  the  misrepresen- 
tation of  the  other  party,  or  that,  though  not  so  induced  or  encouraged,  it  was  known  to 
and  perceived  by  him,  and  was  taken  advantage  of,  or  it  may  be  that  he  was  not  aware 
of  the  mistake.  Whatever  may  be  the  circumstances  of  the  case,  a  court  of  equity  may, 
ITnder  the  peculiar  circumstances  of  the  case,  grant  relief.  But  if  it  appear  that  the  mis- 
fcike  was  induced  or  encouraged  by  the  misrepresentation  of  the  other  party  to  the  trans- 
action,  or  was  perceived  by  him  and  taken  advantage  of,  the  court  will  be  more  disposed 
to  grant  relief  than  in  cases  where  it  does  not  appear  that  he  was  aware  of  the  misfcike. 
Kerr  on  Fraud  and  Mistake,  2  Ed.  470.  —  Ed. 


SECT.  I.]  COOPER   V.    PHIBRS.  101 

him  iu  bis  cause  petition,  wliich  is  verified,  and  to  which  there  is  no  con- 
tradiction, and  iu  all  probability  it  seems  to  be  the  truth,  that  his  uncle 
told  him,  not  intending  to  misrepresent  anything,  but  being  in  fact  in 
error,  that  he  was  entitled  to  this  fishery  as  his  own  fee  simple  property ; 
and  the  appellant,  his  nephew,  after  his  death  acting  on  the  belief  of  the 
truth  of  what  his  uncle  had  so  told  him,  entered  into  the  agi'oement  iu 
question.  It  appears  to  me,  therefore,  that  it  is  impossible  to  si\y  that  he 
is  not  entitled  to  the  relief  which  he  asks,  namely,  to  have  the  agreement 
delivered  up  and  the  rent  repaid.  That  being  so,  he  would  be  entitled  to 
relief,  but  he  is  only  entitled  to  this  relief  on  certain  terms,  to  which  I  will 
presently  advert. 

Before  I  do  so  I  must  refer  to  an  argument  which  was  relied  on  very 
much  by  the  respondents,  namely,  that  the  fishery  conveyed  in  1806  by 
Sir  Edward  Croflon  was  not  the  fishery  in  the  estuary,  but  only  in  the 
rivers,  and  that  consequently  the  nephew,  Edward  Joshua,  had  no  right 
whatever  in  that  fishery  under  the  descent  from  his  uncle.  I  cannot  think 
that  there  is  any  foundation  for  this  suggestion,  because  the  Act  of  Parlia- 
ment expressly  states  that  the  fishery  in  the  estuary  and  at  the  mouths  of 
the  rivers,  had  descended  from  the  lunatic  tuicle  upon  Edward  Joshua. 
But  even  if  it  had  been  so,  in  my  opinion  it  would  not  have  made  the 
least  difference,  for  the  right  of  fishing  in  rivers  traversing  the  lands  is  an 
incident  to  the  right  of  property,  and  that  property  certainly  was  governed 
by  the  covenant  of  1827. 

The  argument  on  the  part  of  the  respondents  is,  that  the  right  to  make 
the  new  cuts  conferred  by  the  Act  was  a  new  right,  and  that  that  new 
right  was  granted  to  Edward  Joshua  in  fee.  I  do  iwt  think  that  that  is  a 
true  construction  of  the  Act,  but  if  it  was  it  would  be  a  right  which  Ed- 
ward Joshua  obtained  by  virtue  of  his  right  to  the  lands  and  to  the  fishing 
iu  the  fresh  waters.  As  to  that  right  he  stood  in  a  fiduciary  relation  to  those 
interested  under  the  deed  of  1827.  But  for  his  right  under  that  instru- 
ment he  could  not  have  obtained  the  powers  conferred  by  the  Act.  In  my 
opinion  the  very  same  doctrine  that  is  acted  upon  so  continually,  that  a 
tenant  for  life  of  a  renewable  property,  if  he  renews  it,  cannot  by  possibility 
renew  it  for  his  own  benefit,  applies  in  principle  to  this  case.  If  the  facts 
had  been  such  as  the  respondents  contend  they  were,  namely,  tliat  he  was 
the  owner  in  fee  simple  under  the  Act  of  Parliament,  and  that  the  prop- 
erty was  not  governed  by  the  covenants  of  1827,  still,  even  if  it  was  not 
governed  by  those  covenants,  he  stood  in  a  fiduciary  character,  which  dis- 
qualified him  from  making  any  such  contention  as  that.  Therefore,  qndcnn- 
qne  vi/i,  it  is  clear  to  my  mind  that  the  appellant  is  entitled  to  the  relief  ho 
asks  by  getting  rid  of  this  agreement. 

Then  the  next  question  i.s,  what  are  the  terms  upon  which  this  relief  is 
to  1)0  given  1  Now,  the  respondents  allege  that  their  father,  Edward 
Joshua,  in  making  the  canals  and  other  works  necessary  for  establishing 


102  COOPER   V.    PHIBBS.  [CHAP.  II. 

the  fishery,  and  also  in  purchasing  up  fishery  rights  in  the  bay,  expended 
very  large  sums  of  money.  First  of  all,  he  was  at  the  expense  of  obtaining 
the  Act  of  Parliament.  It  was  intended  that  the  Act  of  Parliament  should 
be  passed  in  the  lunatic's  lifetime,  but  the  lunatic  having  died,  it  was 
treated  as  being  from  the  beginning  Edward  Joshua's  expenditure.  He 
was  at  great  expense  in  purchasing  up  the  rights  of  fishery  of  different 
proprietors  on  the  banks,  and  he  was  at  very  large  expense  in  making  cuts 
and  removing  obstructions,  so  as  to  make  the  fishery  available.  That,  at 
least,  is  the  allegation  of  the  respondents.  Now,  if  that  is  so,  the  question 
is,  upon  what  terms  ought  this  relief  to  be  granted  ]  It  is  impossible  to 
decide  the  merits  of  this  claim  in  the  absence  of  the  persons  entitled  to 
the  corpus  of  the  estate.  On  the  marriage  of  the  appellant,  in  1858,  the 
property  was  settled  to  uses,  and  on  trusts,  for  the  benefit  of  the  appellant 
and  his  wife,  and  the  issue  of  the  marriage.  The  appellant,  therefore,  has 
not  brought  before  the  court  all  the  persons  interested  in  this  question. 
If  the  respondents  succeed  in  establishing  their  lien,  it  will  be  a  lien  affect- 
ing the  life  interest  of  the  appellant,  as  well  as  the  rest  of  the  corpus  of  the 
property,  and  so  justice  would  not  be  done  to  them  if  we  were  to  give  re- 
lief to  the  appellant  by  simply  setting  aside  the  agreement  on  which  they 
claim  a  lien.  They  have  a  right  to  have  that  question  disposed  of.  I  sub- 
mit to  your  Lordships,  therefore,  that  all  that  we  can  do  is  to  remit  the 
case  to  the  Court  of  Chancery  in  Ireland,  with  declarations  which  shall 
enable  the  parties  to  have  this  question  properly  decided. 

The  declarations  that  I  would  suggest  to  your  Lordships  as  the  proper 
ones  to  be  made,  are  these  :  To  declare  that  the  lands  and  hereditaments 
conveyed  to  Joshua  Edward  Cooper  by  the  deeds  of  1806  (including  the 
fishery  of  Ballysadare),  were  comprised  in  the  settlement  of  the  13th  of 
February,  1827,  and  were  bound  by  the  covenant  of  Edward  Joshua 
Cooper  therein  contained ;  and  that  at  the  time  of  tlie  passing  of  the  Act 
of  Parliament  of  1  Vict.  c.  89,  the  said  Edward  Joshua  Cooper  was  a  trus- 
tee of  the  lands,  hereditaments,  and  fishery  of  Ballysadare,  for  the  persons 
entitled  under  the  trusts  of  the  aforesaid  settlement  of  1827,  and  that  the 
rights,  powers,  and  interests  granted  to  the  said  Edward  Joshua  Cooper, 
his  heirs  and  assigns,  by  the  said  Act  of  Parliament,  must  be  deemed  to 
have  been  taken  by  him  as  a  trustee  for  the  persons  entitled  under  the  set- 
tlement of  1827,  including  himself  as  tenant  for  life;  and  that  all  the  es- 
tates, rights,  and  interests  acquired  by  the  said  Edward  Joshua  Cooper, 
under  and  by  virtue  of  such  powers,  and  the  canal  and  works  made  and 
constructed  by  him,  by  virtue  of  the  said  Act,  were  acquired,  made,  and 
held  by  him  in  like  manner,  in  trust  for  himself  and  the  other  persons  en- 
titled under  the  said  settlement  of  1827.  And  farther  declare  :  that  the 
lands  and  fishery  of  Ballysadare  were  also  comprised  in  the  settlement  of 
the  6th  of  August,  1858  ;  and  that  under  and  by  virtue  of  the  said  several 
settlements,  the  appellant  was,  at  the  time  of  the  making  of  the  agreement 


SECT.  I.]  COOPER   V.    PHIBBS.  103 

of  the  Hth  day  of  October,  in  1863,  in  his  petition  mentioned,  entitled  as 
tenant  for  life  to  the  said  lands  and  fishery  of  Ballysadare,  including 
therein  the  rights  and  interests  and  works  acquired  and  made  by  the  said 
Edward  Joshua  Cooper,  as  aforesaid  (save  and  except  only  the  piece  of 
laud  demised  by  the  deed  of  the  27th  of  September,  1858,  and  the  build- 
ings thereon).  That  alludes  to  a  lease  that  was  granted  by  the  appellant, 
the  details  of  which  it  is  immaterial  to  allude  to,  for  this  question.  And 
farther  declare  :  that  the  aforesaid  agreement  of  the  14th  of  October,  1863, 
in  the  said  petition  mentioned,  was  made  and  entered  iuto  by  the  parties 
to  the  same  under  mistake,  and  in  ignorance  of  the  actually  existing  rights 
and  interests  of  such  parties  in  the  said  fishery.  And  farther  declare  ; 
that  the  said  agreement  is  not  in  equity  binding  upon  tlie  appellant  and 
respondents,  but  ought  to  be  set  aside,  subject  to  the  appellant  paying  to 
the  respondents  a  proper  occupation  rent  for  the  said  excepted  piece  of 
land  and  cottage,  to  be  ascertained  by  the  blaster  in  the  usual  manner  : 
and  subject  also,  as  hereinafter  is  mentioned,  that  is  to  say,  the  respondents 
claiming  to  have  a  lien  on  the  said  fishery  on  account  of  the  moneys  said 
to  have  been  expended  by  the  said  Edward  Joshua  Cooper  in  obtaining  the 
said  Act  of  Parliament,  and  in  purchasing  the  said  rights  of  fishery,  and 
in  making  and  improving  the  same.  Let  the  said  petition  stand  over  for 
six  months,  with  liberty  for  the  appellant  to  bring  before  the  court,  by 
supplemental  petition,  all  persons  interested  with  respect  to  the  said  claim, 
and  refer  it  back  to  the  court  to  do  as  niay  be  just  on  such  supplemental 
petition,  having  regard  to  the  aforesaid  declaration ;  and  if  the  appellant 
shall  fail  to  file  such  supplemental  petition  within  the  period  aforesaid,  or 
such  farther  period  as  may  be  allowed  by  the  court,  then  let  the  present 
appeal  be  dismissed  with  costs. 

Upon  these  grounds,  I  move  your  Lordships  that  the  decree  below  should 
be  reversed,  subject  to  those  declarations. 

Lord  Westburt.  The  result,*  therefore,  is,  that  at  the  time  of  the  agree- 
ment for  the  lease  which  it  is  the  object  of  this  petition  to  set  aside,  the  par- 
ties dealt  with  one  another  luider  a  mutual  mistake  as  to  their  respective 
rights.  The  ]:)etitioner  did  not  suppose  that  he  was,  what  in  truth  he  was, 
tenant  for  life  of  the  fishery.  The  other  parties  acted  upon  the  impression 
given  to  them  by  their  father,  that  he  (their  father)  was  the  owner  of  the 
fishery,  and  that  the  fishery  had  descended  to  them.  In  such  a  state  of 
things  there  can  be  no  doubt  of  the  rule  of  a  court  of  equity  with  regard  to 
the  dealing  with  that  agreement.  It  is  said  iynorantia  juris  haud  excusat ; 
but  in  that  maxim  the  word  Jw«  is  used  in  tlie  souse  of  denoting  general  law, 
the  ordinary  law  of  the  country.  I5ut  when  the  word  jus  is  used  in  the 
sense  of  denoting  a  private  right,  that  maxim  has  no  application.''     Private 

'  ."<o  mnch  of  tho  ojiinion  an  relates  to  the  question  of  title  has  been  omitted.  —  En. 
*  With  rf>{nr(l  to  the  objection,  that  tlic  mistake  (if  any)  was  one  of  law,  and  that  the 
rule  irfjiormU in  juris  runiiiiein  cjcauuU  aiiplifs,  I  wouhl  observe  upon  the  [icculiarity  of 


104  COOPER   V.    PHIBBS.  [CHAP.  II. 

right  of  ownership  is  a  matter  of  fact  ;  it  may  be  the  result  also  of  matter 
of  law ;  but  if  parties  contract  under  a  mutual  mistake  and  misapprehen- 
sion as  to  their  relative  and  i-espective  rights,  the  result  is,  that  that  agree- 
ment is  liable  to  be  set  aside  as  having  proceeded  upon  a  common  mistake. 
Now,  that  was  the  case  with  these  jjai-ties  —  the  respondents  believed 
themselves  to  be  entitled  to  the  property,  the  petitioner  believed  that  he 
was  a  stranger  to  it,  the  mistake  is  discovered,  and  the  agreement  cannot 
stand. 

this  case,  that  the  ignorance  imputable  to  the  party  was  of  a  matter  of  law  arising  upon 
tlie  doulitful  construction  of  a  grant.  This  is  very  difl'erent  from  the  ignorance  of  a  well- 
known  rule  of  law.  And  there  are  many  cases  to  be  found  in  which  equity,  upon  a  mere 
mistake  of  the  law,  without  the  admixture  of  other  circumstances,  has  given  relief  to  a 
party  who  has  dealt  with  his  property  under  the  influence  of  such  mistake.  Therefore, 
although  when  a  certain  construction  has  been  put  by  a  court  of  law  upon  a  deed,  it 
must  be  taken  that  the  legal  construction  was  clear,  yet  the  ignorance,  before  the  deci- 
sion, of  what  was  the  true  construction,  cannot,  in  my  opinion,  be  pressed  to  the  extent 
of  depriving  a  person  of  lelief  on  the  ground  that  he  was  bound  hiuiself  to  have  kuowu 
beforehand  how  the  grant  must  be  construed.  Lord  Chelmsford  in  Earl  Beauchamp  v. 
Winn,  L.  E.  6  H.  L.  223,  234. 

A  misre])rpsentation  of  law  is  this :  when  you  state  the  facts,  and  state  a  conclusion  of 
law,  so  as  to  distinguish  between  facts  and  law.  The  man  who  knows  the  facts  is  taken 
to  know  the  law;  but  when  you  state  that  as  a  fact  which  no  doubt  involves,  as  most 
facts  do,  a  conclusion  of  law,  that  is  still  a  statement  of  fact  and  not  a  statement  of  law. 
Suppose  a  man  is  asked  by  a  tradesman  whether  he  can  give  credit  to  a  lady,  and  the  an- 
swer is,  '*  You  may,  she  is  a  single  woman  of  large  fortune."  It  turns  out  that  the  man 
who  gave  that  answer  knew  that  the  lady  had  gone  through  the  ceremony  of  marriage 
with  a  man  who  was  believed  to  be  a  married  man,  and  that  she  had  been  advised  that 
that  marriage  ceremony  was  null  and  void,  though  it  had  Tiot  been  declared  so  by  any 
court,  and  it  afterwaids  turned  out  they  were  all  mistaken,  that  the  first  marriage  of  the 
man  was  void,  so  that  the  lad}'  was  married.  He  does  not  tell  the  tradesman  all  these 
facts,  but  states  that  she  is  single.  That  is  a  statement  of  fact.  If  he  had  told  liiiu  the 
whole  story,  and  all  the  facts,  and  said,  "Now,  you  see,  the  lady  is  single,"  that  would 
have  been  a  misrepresentation  of  law.  But  the  single  fact  he  states,  that  the  lady  is  un- 
married, is  a  statement  of  fact,  neither  more  nor  less;  and  it  is  not  the  less  a  statement  of 
fact,  that  in  order  to  arrive  at  it  you  must  know  more  or  less  of  the  law. 

There  is  not  a  single  fact  connected  with  personal  status  that  does  not,  more  or  less, 
involve  a  question  of  law.  If  you  state  that  a  man  is  the  eldest  son  of  a  maniage,  you 
state  a  question  of  law,  because  you  must  know  that  there  has  been  a  valid  marriage,  and 
that  that  man  was  the  first-born  son  after  the  marriage,  or,  in  some  countries,  before. 
Therefore,  to  state  it  is  not  a  representation  of  fact  seems  to  arise  from  a  confusion  of 
ideas. 

It  is  not  the  less  a  fact  because  that  fact  involves  some  knowledge  or  relation  of  law. 
There  is  hardly  any  fact  which  does  not  involve  it.  If  you  state  that  a  man  is  in  pos- 
session of  an  estate  of  £10,000  a  year,  the  notion  of  possession  is  a  l«>gal  notion,  and  in- 
volves knowledge  of  law;  nor  can  any  other  fact  in  connection  with  property  be  stated 
which  does  not  involve  such  knowledge  of  law.  To  state  that  a  man  is  entitled  to 
£10,000  consols  involves  all  sorts  of  law.  Therefore  this  is  a  statement  of  fact,  and  noth- 
ing more;  and  I  hold  the  argument  to  be  wholly  unfounded  which  maintained  that  it 
was  a  statement  of  law.  Sir  Geouge  Jessel,  M.  R  ,  in  Eaglesfield  v.  Marquis  of  Londou- 
derry,  4  Ch.  D.  693,  702.  —  Ed. 


SECT.  I.]  COOPER   V.    PHIBBS.  105 

But  then,  when  the  appellant  comes  here  to  set  aside  the  agreement,  an 
obligixtion  lies  upon  him  so  to  constitute  his  suit  as  to  enable  a  court  of 
equity  to  deal  with  the  whole  of  the  subject-matter,  and  once  for  all  to  dis- 
pose of  the  rights  and  interests  of  the  parties  in  the  settlement.  Now  al- 
though the  agreement  was  inoperative  for  the  purpose  of  giving  to  the 
petitioner  a  valid  lease  of  the  property,  yet  it  might  operate  to  this  extent, 
that  so  far  as  the  respondents  had  in  equity  a  lien  upon  the  property,  their 
estates  and  interests  in  respect  of  that  lien  miglit  be  affected  by  the  agree- 
ment. And  there  is  another  particular  also  which  must  be  noticed,  which 
fur  the  moment,  I  think,  in  the  preparation  of  these  minutes,  has  escaped 
our  attention,  namely,  that  unquestionably  the  respondents  were  entitled 
to  the  cottiige  and  to  the  piece  of  land,  upon  which  no  rent  has  been  paid. 
But,  during  the  time  that  has  elapsed,  I  understand  the  fact  to  be,  that 
the  petitioner  has  had  the  possession  and  enjoyment  of  tliat  cottage  and  of 
that  piece  of  land.  In  respect  of  those  paiticulars,  therefore,  a  proper 
occupation  rent  ought  to  be  paid  by  him. 

What,  then,  are  tlie  rights  and  interests  of  the  parties  which  ought  to  be 
ascertained  1  They  are,  as  I  have  already  observed,  the  sum  of  money  due 
to  the  respondents,  and  charged  upon  the  property,  as  being  the  expendi- 
ture of  their  father,  the  benefit  of  which  the  petitioner,  as  tenant  for  life, 
has  enjoyed.  Now,  no  doubt  that  expenditure  constitutes  a  lien,  —  a 
charge  in  the  nature  of  a  mortgage  charge  upon  the  property.  It  must  be 
ascertained,  and  an  obligation  lies  upon  the  present  appelhxnt  to  give  the 
co'art  the  means  of  ascertaining  it.  That  is  the  reason,  therefore,  why  the 
decree  is  proposed  to  be  put  in  the  form  which  your  Lordships  have  heard, 
namely,  that  although  a  declaration  is  made,  in  order  to  show  the  basis 
upon  which  the  opinion  of  the  House  is  founded,  with  respect  to  the  in- 
validity of  the  agreement,  yet  the  House  stops  short  of  giving  positive  re- 
lief, except  on  the  terms  imposed  on  the  petitioner,  to  which  in  reality,  by 
the  prayer  of  his  petition,  he  submits,  by  giving  an  opportunity  to  the 
respondents  to  ascertain  the  full  measure  of  their  rights  and  interests,  in 
order  that  complete  justice  may  be  done,  by  declaring  that  they  will  bo 
entitled  to  a  charge  fur  the  principal  money  so  ascertained,  and  to  interest 
thereon,  at  the  rate  of  4  per  cent,  from  the  time  of  the  death  of  their 
father,  Edward  Joshua  Cooper,  who  was  the  last  person  in  possession  of  the 
fishery  antecedent  to  the  title  of  the  present  ai)pollant,  and  declaring  also 
(which  must  be  adilcd  to  that),  tliat  they  are  entitled  to  an  occupation  rent 
during  the  time  that  the  present  appellant  has  been  in  possession  and 
enjoyment  of  the  cottage  and   the  piece  of  laud. 

My  Lords,  tliese  terms,  1  have  very  little  douI)t,  will  be  submitted  to  by 
the  petitioner,  because  they  are  consistent  with  the  willingness,  which  he 
has  exjiressed  in  his  petition,  to  havi;  tlic  wIkjIo  of  tiio  rights  ascertaiuofl. 
And  if  that  be  done,  and  if  lie  brings  before  the  court,  by  supplenicut:il 
cause  petitiiju,  the  parties  who  are  interested  in  the  ascertainment  of  those 


106  Ex  parte  james.     In  re  CONDON.  [chap.  n. 

lights,  the  suVjject  will  be  disposed  of ;  but,  if  he  does  not  do  so,  then  he 
has  brought  forward  an  insufficient  and  incompetent  petition,  upon  which 
full  equity  and  full  relief  cannot  be  given,  and  the  only  result  must  be,  that 
his  petition  to  the  court  below  ought  to  be  dismissed,  though  it  must  be 
dismissed  upon  quite  different  grounds. 

My  Lords,  I  regret  to  find  that  observations  have  been  made  in  the 
court  below,  though  I  cannot  at  all  suppose  that  they  were  the  ratio  deci- 
dendi, that  upon  some  extrinsic  evidence  it  appeared  to  the  court  below 
that  the  fishery  was  not  intended  to  be  comprised  in  the  deed  of  1827. 
When  there  is  an  application  to  correct  an  instrument,  or  to  set  aside  an 
instrument,  the  intention  of  the  parties  is  to  be  collected  from  the  words 
they  have  used ;  and  no  words  can  be  more  pertinent  or  more  comprehen- 
sive than  the  words  in  the  settlement  of  1827,  and  the  words  in  the  settle- 
ment of  1858,  to  denote  the  intention  of  including  the  fishery  in  the 
provisions  of  those  deeds,  and  making  it  subject  to  the  trusts  which  are 
thereby  created. 

Lord  CoLONSAY  concurred. 


Ex  parte   JAMES.     In   re   CONDON. 

In  Chancery,  July  10,   1874. 

[Reported  in  Law  Reports  9  Chancery  Appeals,  609.] 

This  was  an  appeal  from  a  decision  of  Mr.  Registrar  Roche,  sitting  as 
Chief  Judge  in  Bankruptcy. 

In  the  month  of  October,  1873,  H.  Lradshaw  commenced  an  action  in 
the  Court  of  Queen's  Bench  against  John  Condon,  in  which  he  obtained 
judgment  for  his  debt  and  costs,  amounting  to  £274  3s.  5c?. 

On  the  15th  of  November,  1873,  Bradshaw  sued  out  a  writ  o?  fieri  facias 
against  Condon,  and  on  the  17th  of  November  the  sheriff  of  Middlesex 
took  possession  under  it  of  certain  goods  of  the  defendant's  at  Millwall. 

On  the  18th  of  November,  Condon  filed  a  petition  for  liquidation  by 
arrangement,  notice  of  which  was  served  on  the  sheriff  on  the  22nd  of 
November. 

On  the  same  day  the  sheriff  sold  the  goods,  which  produced  a  net  sum 

of  £142  15s.  6(Z. 

On  the  5th  of  December  the  first  general  meeting  of  creditors  was  held, 
but  no  resolution  was  passed  except  that  the  meeting  should  be  adjourned 
till  the  16th  of  December. 

On  the  16th  of  December  neither  the  debtor  nor  his  solicitor  was  present 
at  the  adjourned  meeting,  and  no  resolution  was  passed  by  the  creditors. 
No  further  proceedings  were  taken  in  the  liquidation. 


SECT.  I.]  Ex  parte  james.     In  re  CONDON.  107 

Oil  the  17th  of  December  the  sheriff  paid  Bradshaw  the  sum  of  £142 
15«.  6i/.,  which  he  had  retained  to  await  the  result  of  the  petition  for 
liquidation. 

On  the  19th  of  December  a  petition  for  adjudication  in  bankruptcy  was 
filed  by  another  of  Condon's  creditors.  This  petition  was  filed  under  Rule 
2G7  of  the  Bankruptcy  Kules,  1870,  and  stated  the  filing  of  the  petition  for 
liquidation  by  arrangement,  and  that  no  resolution  had  been  passed  at  tlie 
meeting  of  creditors,  and  that  no  other  proceedings  had  taken  place  under 
the  petition  for  liquidation. 

On  the  10th  of  January,  1874,  Condon  was  adjudicated  bankrupt,  and 
Mr.  J.   E.  James  was  appointed  trustee  of  his  estate. 

Soon  after  the  appointment  of  the  said  trustee  the  solicitors  for  the  trus- 
tee threatened  Bradshaw  with  proceedings  if  the  money  received  by  him 
from  the  sheriff  was  not  paid  over  to  the  trustee,  and  on  the  23rd  of  Feb- 
ruary, 1874,  Bradshaw,  being  advised  that,  according  to  the  law  as  then 
laid  down,  he  would  have  no  defence  against  such  proceedings,  paid  the 
sura  of  £142  15s.  6t/.  to  the  trustee. 

After  the  decision  of  the  case  of  Ex  parte  Villars  by  the  full  Court  of 
Appeal,^  Bradshaw  applied  to  the  trustee  to  refund  the  money,  and  the 
matter  having  been  brought  before  the  Registrar,  on  the  26th  of  June  he 
made  an  order  to  that  effect.     From  this  decision  the  trustee  appealed. 

Mr.  Tliesigei',  Q.  C,  and  Mr.  Cooper  Willis,  for  the  appellant. 

Mr.  De  Gex,  Q.  C,  and  Mr.  Finlay  Knight,  for  the  execution 
creditor. 

Sir  W.  M.  James,  L.  J.  I  am  of  opinion  that  the  order  of  the  Registrar 
must  be  affirmed.  I  adhere  to  the  opinion  which  I  expressed  in  Ex  parte 
Villars,  that  the  rights  of  an  execution  creditor  ought  to  be  respected 
except  su  far  as  the  Act  of  Parliament  has  expressly  interfered  with  them. 
In  levying  his  execution,  he  has  only  done  what  he  had  a  right  to,  and  he 
is  entitled  to  enjoy  the  proceeds  of  it  unless  he  is  restrained  from  so  doing 
by  the  Act.  The  onus  of  proof  is  thrown  on  those  who  desire  to  show  that 
he  ought  not  to  reap  the  fruits  of  his  execution. 

In  this  case  it  is  impossible  to  say  that  the  adjudication  of  bankruptcy 
was  made  on  any  petition  of  which  the  sheriff  had  notice  before  he  paid  the 
money  to  the  execution  creditor.  If  before  the  proceedings  in  liquidation 
Imd  failed,  another  petition  had  been  presented  before  the  money  had  been 
paid  over  by  the  sheriff,  it  would  have  been  a  different  case.  But  the  re- 
sult of  what  took  place  at  the  meeting  of  the  IGth  of  December  was,  that 
the  proceedings  under  the  ])etitiou  for  li(iuidation  came  hopelessly  to  an 
end.  There  was  nothing  in  the  nature  of  a  resolution,  nothing  that  could 
result  in  the  appointment  of  a  trustee.  Any  creditor  might,  if  he  had 
chosen  to  do  so,  have  presented  a  petition  for  adjudication  witliin  the  four- 
teen days,  and  thus  have  intercepted  the  right  of  the  execution  creditor ; 

1  L.  U.  \>  Cli.  Aj..  133. 


108  Ex  parte  james.     In  re  CONDON.  [chap.  ii. 

but  this  was  not  done,  and  I  think,  therefore,  that  the  sheriff  was  justified 
in  paying  over  the  money,  and  that  the  execution  creditor  was  entitled  to 
keep  the  proceeds  of  the  sale. 

With  regard  to  the  other  point,  that  the  money  was  voluntarily  paid  to 
the  trustee  under  a  mistake  of  law,  and  not  of  fact,  I  think  that  the  princi- 
ple that  money  paid  under  a  mistake  of  law  cannot  be  recovered  must  not 
be  pressed  too  far,  and  there  are  several  cases  in  which  the  Court  of  Chan- 
cery has  held  itself  not  bound  strictly  by  it.  I  am  of  opinion  that  a  trus- 
tee in  bankruptcy  is  an  officer  of  the  court.  He  has  inquisitorial  powers 
given  him  by  the  court,  and  the  court  regards  him  as  its  officer,  and  he  is 
to  hold  money  in  his  hands  upon  trust  for  its  equitable  distribution  among 
the  creditors.  The  court  then,  finding  that  he  has  in  his  hands  money 
which  in  equity  belongs  to  some  one  else,  ought  to  set  an  example  to  the 
world  by  paying  it  to  the  person  really  entitled  to  it.  In  my  opinion  the 
Court  of  Bankruptcy  ought  to  be  as  honest  as  other  people.  The  appeal 
must  be  dismissed,  but  without  costs. 

Sir  (jr.  Mellish,  L.  J.  I  am  of  the  same  opinion.  This  case  cannot,  in 
principle,  be  distinguished  from  Ex  j^cc^'t^  Villars,^  as  to  the  construction  of 
the  87th  section.  Although  a  petition  for  adjudication  is  alone  mentioned 
in  it,  it  must  be  understood,  under  sect.  125,  to  apply  equally  to  a  petition 
for  liquidation  by  arrangement,  and  therefore  it  must  be  read  as  if  a  petition 
for  liquidation  had  been  mentioned  in  it.  When,  therefore,  the  sheriff  has 
received  notice  of  a  liquidation  petition  having  been  filed,  he  is  bound  to  keep 
the  proceeds  of  the  sale  beyond  the  fourteen  days,  tintil  he  knows  whether 
the  proceedings  under  the  petition  have  come  to  an  end  or  not.  The  question 
is,  therefore,  what  in  the  case  of  proceedings  in  liquidation  corresponds  to 
an  adjudication  in  bankruptcy]  The  87th  section  says  in  effect  that  the 
sheriff  is  to  keep  the  proceeds  of  the  sale  until  he  has  ascertained  whether 
the  debtor  against  whom  the  bankruptcy  petition  has  been  presented  is  or 
is  not  adjudicated  bankrupt  on  that  petition  or  any  other  petition  of  which 
the  sheriff  has  notice;  and,  by  the  125th  section,  the  appointment  of  a 
trustee  under  a  liquidation  petition  is  made  equivalent  to  an  adjudication 
in  bankruptcy.  I  am  of  opinion  that  when,  on  the  16th  of  December,  the 
creditors  dispersed  without  coming  to  any  resolution,  all  proceedings  under 
the  liquidation  came  to  an  end,  and  it  became  impossible,  under  that  peti- 
tion, that  a  trustee  should  be  appointed.  But  it  is  contended  that,  although 
it  was  impossible  that  a  trustee  should  be  appointed,  it  was  possible  for  the 
debtor  to  be  adjudicated  bankrupt  on  the  declaration  of  insolvency  contained 
in  the  petition  for  liquidation,  and  that  the  sheriff  ought  to  have  kept  the 
proceeds  of  the  sale  until  he  had  seen  whether  this  would  be  done  or  not. 
In  my  opinion  it  would  be  a  very  inconvenient  construction  to  put  upon 
the  87th  section.  The  effect  would  be,  that  the  sheriff  would  have  to  keep 
the  money  for  six  months,  because,  at  any  time  within  that  period,  a  bank- 

1  L.  R.  9  Ch.  Ap.  432. 


SECT.  I.]  Ex  parte  SIMMONDS.     In  re  carnac.  109 

ruptcy  petition  founded  on  the  liquidation  petition  might  be  presented 
against  the  debtor.  It  was  argued  that  the  2G7th  rule  only  requires  that 
notice  shall  be  given  to  the  court,  and  not  that  a  petition  shall  be  Hied  in 
the  event  of  neglect  on  the  part  of  the  creditors  to  pass  a  resolution  for 
liquidation.  But  I  think  that  it  is  not  competent  to  the  court  to  apply 
the  General  Rales  in  such  a  way  as  to  take  away  from  an  execution  creditor 
the  rights  given  him  by  the  Act  of  Parliament,  and  that,  according  to  the 
true  construction  of  the  125th  section,  it  was  not  contemplated  that  a 
debtor  who  has  filed  a  liquidation  petition  should  be  adjudicated  bankrupt 
on  the  petition  for  liquidation  without  a  petition  in  bankruptcy,  unless  the 
case  came  within  the  12th  sub-section  of  that  section.  Whetlier,  under 
that  sub-section,  the  debtor  could  be  adjudicated  bankrupt  without  a  peti- 
tion in  bankruptcy,  it  is  not  necessary  now  to  decide,  because  it  appears  to 
me  that  that  sub-section  only  applies  to  cases  in  which  the  creditors  have 
passed  a  resolution  and  made  some  progress  in  the  liquidation.  The  Chief 
Judge  has  very  properly  decided  that  an  application  under  the  lG7th  rule 
must  be  made  by  petition.  At  any  rate,  in  my  opinion,  an  execution  cred- 
itor cannot  have  his  rights  taken  away  by  the  Rules. 

I  am  therefore  of  opinion,  consistently  with  jE'j;/5a;'/e  Villars,'that  as  soon 
as  the  prosecution  of  the  proceedings  in  liquidation  became  impossible,  the 
sheriff,  having  no  notice  of  any  other  petition,  was  justified  in  paying  over 
the  money  to  the  execution  creditor,  and  that  it  cannot  be  recovered  from 
him. 

With  respect  to  the  second  point,  namely,  the  payment  of  the  money  to 
the  trustee  under  a  mistake  of  law,  I  entirely  agree  with  the  observations 
of  the  Lord  Justice. 

I  also  agree  that  the  appeal  should  be  dismissed  without  costs. 


Ex  parte  SIMMONDS.     In  re  CARNAC. 
Ix  THE  Court  of  Appeal,  October  30,   1885. 

[Reported  in  Law  Rejiorls,  10  Queen's  Bench  Division,  308.] 

Appeal  by  the  trustee  in  the  liquidation  of  Sir  John  Rivctt  Caniac 
against  an  order  of  Mr.  Regi.strar  Murray,  that  the  trustee  should,  out  of 
the  debtor's  estate,  repay  to  G.  E.  Seymour,  the  surviving  trustee  of  the 
settlement  made  on  the  marriage  of  Sir  J.  R.  Caniac,  a  sum  of  £509  2,s\  2d., 
which  J.  W.  YAc,  a  deceased  trustee  of  the  settlement,  had  paid  to  the 
trustee  in  tlic  liquidation. 

By  the  settlement,  dated  the  30th  of  November,  18iO,  a  sum  of  £5000 
was  vested  in  hide  and  Seymour,  upon  trust  to  invest  the  same  in  Goveru- 

1  L.  U.  7  CIi.  A 11.  132. 


110  Ex  parte  simmonds.     In  re  caknac.  [chap,  il 

ment  or  real  securities,  and  to  pay  the  income  thereof  to  Sir  John  for  his 
life,  and  after  his  death  to  his  wife  for  her  life,  and,  after  the  death  of  the 
survivor  of  them,  the  trust  fund  was  to  be  held  in  trust  for  the  children 
and  other  issue  of  the  niarriage.  The  £5000  was  invested  in  the  purchase 
of  a  sum  of  £5446  2s.  \\d.  consols,  in  the  names  of  the  two  trustees.  In 
the  year  1857,  at  the  request  of  Sir  John,  the  consols  were  sold  by  the 
trustees,  and  part  of  the  proceeds  of  sale  were  invested  in  the  purchase 
of  £2200  guaranteed  4  per  cent  stock  of  the  North  Eastern  ilailway 
Company  (a  security  not  authorized  by  the  settlement),  and  the  residue, 
amounting  to  £3000,  was  advanced  to  Sir  John.  This  was  done  upon 
the  terms  of  an  agreement,  a  memorandum  of  which  was  contained  in  an 
account  book  kept  by  Ede,  who  was  the  acting  trustee  of  the  settlement. 
This  memorandum  was  as  follows  :  — 

"  Sir  John  and  Lady  R.  Camac's  Trust  Fund. 

"£5446  2s.  \\d.  consols  were,  at  the  request  of  Sir  John  and 
Lady  Carnac,  sold  by  John  W.  Ede  and  George  Edward  Seymour,  the 
trustees. 

"  Out  of  the  proceeds  £3000  were  advanced  to  Sir  John  Carnac  on  the 
security  of  his  bond,  at  4  per  cent  per  annum.  His  life  policy  for  £3200 
in  the  London  Life  Office  was  also  assigned  to  the  trustees  as  additional 
security.  The  balance  was  invested  in  the  purchase  of  £2200  North 
Eastern  Railway  guaranteed  4  per  cent  stock, 

"The  dividend  usually  received  by  Sir  J.  Carnac  on  £5446  2s.  \\d.  con- 
sols, l>eing  £81  13s.  lOti.  half-yearly,  less  income  tax,  to  be  paid  him  as 
before,  and  the  balance  invested  and  added  to  the  capital  for  the  benefit  of 
his  children,  on  the  same  trusts  as  the  £5446  2s.  \\d.  consols  were  held. 

"  The  trustees  can  sell  the  guaranteed  stock  at  any  time,  and  invest  the 
proceeds  in  other  railway  guaranteed  or  preference  stock,  or  in  Government 
securities. 

"  When  £400  of  such  stock  shall  have  been  added,  the  interest  on  the 
bond  for  £3000  to  be  reduced  to  4  per  cent  per  annum. 

"Dated  the  15th  of  April,  1857. 

"  We  agree  to  the  above. 

"  (Signed)  J.  R.  Carnac, 
"  Anne  Rivett  Carnac." 

This  arrangement  was  carried  out  until,  in  1875,  Sir  John  filed  a  liquida- 
tion petition.  During  that  period  of  eighteen  years  Sir  John  paid  the 
premiums  on  the  policy,  and  Ede  paid  to  him  half-yearly  the  difference 
between  the  dividend,  to  which  he  would  have  been  entitled  if  the  consols 
had  not  been  sold,  and  the  interest  on  the  £3000,  which  he  was  bound  to 
pay  under  the  agreement.  The  surplus  income  of  the  railway  stock  was 
accumulated  and  invested  as  provided  by  the  agreement. 


SECT.  I.]  Ex  parte  simmoxds.     In  re  carnac.  Ill 

After  the  commencement  of  the  liquidation,  Sir  John  fulled  to  pay  the 
premiums  on  the  policy,  and  Ede  paid  them  out  of  the  income  which  he 
received  as  trustee,  and,  in  consequence  of  a  notice  served  on  him  hy  the 
trustee  in  the  liquidation,  he,  from  1875  down  to  1883,  paid  the  whole  of 
the  surplus  of  the  iucome  which  he  received  to  the  trustee.  The  sutos 
thus  paid  amounted  to  £861  6s.  Sd.  In  1883,  Sir  John  died,  and  the 
£3000  was  repaid  to  the  trustees  of  the  settlement  out  of  the  proceeds  of 
the  policy. 

The  trustees  of  the  settlement  were  afterwards  advised  that  they  had 
been  wrong  in  making  these  payments  to  the  trustee  in  the  liquidation, 
and  they,  in  April,  1884,  applied  to  the  Court  of  Bankruptcy  for  an  order 
that  the  trustee  in  the  liquidation  should,  out  of  any  assets  then  in  his 
hands,  not  disturbing  any  dividends  already  declared,  or  out  of  the  first 
assets  thereafter  to  come  to  his  hands,  repay  to  the  trustees  of  the  settle- 
ment the  sum  of  £861  65.  Sd.  Upon  this  application  (Ede  having  mean- 
while died)  the  registrar  made  the  order  appealed  from.  The  sum  of  £569 
2s.  2d.  represented  the  amount  of  the  payments  made  by  Ede  to  the  trustee 
in  the  liquidation  within  six  years  before  the  date  of  the  notice  of  the 
application  to  the  court. 

The  trustee  in  the  liquidation  deposed  that  the  whole  of  the  moneys 
paid  to  him  by  Ede,  except  the  sum  of  £56  (retained  on  account  of  the 
expenses  of  the  liquidation)  had  been  distributed  in  dividends  amongst  the 
creditors  of  Sir  J.  R.  Carnac. 

Cooper  WiUu,  Q.  C,  and  Alexander,  for  the  appellant. 
J.  G.  Wood,  for  the  respondent. 

Lord  EsHER,  M.  R.  (after  stating  the  flicts),  continued  :  —  The  demand 
made  by  the  trustee  in  the  liquidation  upon  the  trustee  of  the  settlement 
was  wrong  in  point  of  law,  but  the  trustee  of  the  settlement  acceded  to  it. 
The  money  was  paid  erroneously ;  they  were  both  in  error  in  point  of  law. 
It  is  immaterial  whether  the  liquidation  trustee  knew  of  the  agreement  of 
April,  1857;  the  settlement  trustee  did;  it  was  in  his  own  handwriting, 
and  he  had  acted  upon  it  for  years.  The  question  is,  what  ought  the  court 
to  do  whpn  the  mistake  is  discovered?  When  I  find  that  a  proposition  has 
been  laid  down  by  a  court  of  equity  or  by  the  Court  of  Bankruptcy  which 
strikes  me  as  a  good,  a  righteous,  and  a  wholesome  one,  I  eagerly  desire  to 
adopt  it.  Such  a  proposition  was  laid  down  by  James,  L.  J.,  in  Ex  parte 
James.'  A  rule  has  been  adopted  by  courts  of  law  for  the  purjiose  of  put- 
ting an  end  to  litigation,  that,  if  one  litigant  party  has  obtained  money 
from  the  other  erroneously,  under  a  mistake  of  law,  the  party  who  has 
paid  it  cannot  afterwards  recover  it.''     But  the  court  has  never  intimated 

'  r,.  U.  9  rh.  609. 

«  Un.JoubtfMlly  there  arc  cnses  in  the  courts  of  conimnn  law  in  which  it  has  bcnn  hrl,l 
that  monoy  {«i,l  nndor  a  mistake  of  law  cannot  he  ro<ov..re<|.  an<l  it  has  been  fnitlnT 
held  that,  under  certain  circumatances,  tJie  giving  credit  in  account  may  be  treated  iis  so 


112  Ex  -park  simmonds.     hi  re  carnac.  [chap.  ii. 

that  it  is  a  high-minded  thing  to  keep  money  obtained  in  this  way ;  the 
court  allows  the  party  who  has  obtained  it  to  do  a  shabby  thing  in  order 
to  avoid  a  greater  evil,  in  order,  that  is,  to  put  an  end  to  litigation.  But 
James,  L.  J.,  laid  it  down  in  Ex  'parte  James  ^  that,  although  the  court  will 
not  prevent  a  litigant  party  from  acting  in  this  way,  it  will  not  act  so  itself, 
and  it  will  not  allow  its  own  officer  to  act  so.  It  will  direct  its  officer  to 
do  that  which  any  high-minded  man  would  do,  viz.,  not  to  take  advantage 
of  the  mistake  of  law.  This  rule  is  not  confined  to  the  Court  of  Bank- 
ruptcy. If  money  had  by  a  mistake  of  law  come  into  the  hands  of  an 
officer  of  a  court  of  common  law,  the  court  would  order  him  to  repay  it 
as  soon  as  the  mistake  was  discovered.  Of  course,  as  between  litigant 
parties,  even  a  court  of  equity  would  not  prevent  a  litigant  from  doing  a 
shabby  thing.  But  I  cannot  help  thinking  that,  if  money  had  come  into 
the  hands  of  a  receiver  appointed  by  a  court  of  equity  through  a  mistake 
of  law,  the  court  would,  when  the  mistake  was  discovered,  order  him  to 
repay  it.  A  trustee  in  bankruptcy  has  always  been  treated  as  an  officer  of 
the  Court  of  Bankruptcy,  and  the  court  will  order  him  to  act  in  an  honora- 
ble and  high-minded  way,  and  so  it  was  laid  down  by  James  and  Melli?h, 
L.  JJ.,  in  E:c  parte  James.^  It  is  true  that  in  that  case  the  money  in  ques- 
tion had  not  been  divided  among  the  creditors,  but  was  still  in  the  hands 
of  the  trustee,  and  we  are  about  to  carry  the  principle  of  this  decision 
somewhat  further.  But,  though  the  money  has  been  divided  among  the 
creditors,  the  court  sees  that  other  moneys,  which  would  be  applicable  to 
the  payment  of  dividends  to  the  creditors,  are  about  to  come  into  the 
hands  of  the  trustee,  and  it  has  not  been  shown  that  any  injury  will  be 
done  to  any  one  by  ordering  the  trustee  to  apply  this  money  which  is  com- 
ing to  him  to  replace  the  other  -money  which  was  paid  to  him  in  error,  and 
I  think  it  is  right  that  it  should  be  so  applied.  In  my  opinion,  the 
Picgistrar's  order  was  right,  and  the  appeal  must  be  dismissed. 

Cotton,  L.  J.  The  first  question  is,  whether  the  payments  made  to  the 
trustee  in  the  liquidation  were  erroneous  in  point  of  law,  and  in  my 
opinion  they  were.  Can  the  money  thus  wrongly  paid  be  now  recovered 
from  the  trustee]  Undoubtedly  it  cannot  be  recovered  from  him  personally, 
but  that  is  not  the  order  which  has  been  made.  The  order  is  that  the 
trustee  do  repay  the  amount  out  of  moneys  which  it  is  assumed  are  or  will 
be  in  his  hands,  i.  e.,  moneys  available  for  the  payment  of  dividends  to  the 
creditors.  In  my  opinion  it  would  be  wrong  to  interfere  with  any  right  of 
the  trustee  to  be  paid  his  costs  and  expenses  incurred  in  the  liquidation, 
and  the  registrar's  order  must  be  taken  to  mean  that  the  repayment  is  to 

far  equivalent  to  payment  as  to  prevent  sums  wrongly  credited  being  made  the  subject  of 
set-off.     But  in  equity  the  line  between  mistakes  in  law  and  mistakes  in  fact  has  not  been 
so  clearly  and  sharply  drawn.  —  Sir  Robekt  P.  Collier,  in^Daniell  v.  Sinclair,  L.  E. 
6  Ap.  Cas.  186,  190.  —  Ed. 
1  L.  R.  9  Ch.  609. 


SECT.  I.]  Ex  parte  rtmmonds.     In  re  CAKNAC.  .l.TS 

bff  m;ide  out  of  moneys  available  for  the  payment  of  dividends.  Ought 
it  then  to  be  made  out  of  these  moneys?  The  trustee  relies  on  the  ordinary 
rule,  that  money  paid  under  a  mistake  of  law  cannot  be  recovered  in  au 
action  between  litigiint  parties.  That  no  doubt  is  so.  But  the  present 
case  stands  in  quite  a  different  position.  The  trustee  in  the  liquidation 
has,  or  will  have,  funds  in  his  hands,  and  the  question  is,  how  ought  they 
to  be  applied]  It  is  said  that  they  ought  to  be  applied  in  paying  dividends 
to  the  creditors.  Of  course  they  ought,  unless  there  is  some  prior  claim 
to  them.  It  cannot  be  said  that  there  is  any  lien  upon  the  moneys  in  the 
trustee's  hands  in  respect  of  the  sum  which  was  paid  to  him  by  mistake. 
But  the  funds  applicable  to  the  payment  of  dividends  to  the  creditors  have 
been  erroneously  increased  by  means  of  that  payment  to  the  trustee,  and 
the  question  is  whether  the  sum  thus  paid  in  error  ought  not  to  be  repaid 
out  of  those  funds.  In  my  opinion  Ex  parte  James  ^  lays  down  this  propo- 
sition, that  when  the  officer  of  the  court  has  in  his  hands  a  sum  of  money 
■which  has  been  paid  to  him  erroneously  under  a  mistake  of  law,  the  ordinary 
rule  as  between  adverse  litigants  does  not  apply,  but  he  will  be  ordered  to 
repay  it.  It  has  been  urged,  and  rightly  urged,  that  in  Ex  parte  James  ^ 
the  money  was  still  in  the  hands  of  the  trustee,  whereas  in  the  present 
case  the  money  has  been  distributed  among  the  ci-editors,  and  that  our 
decision  will  be  a  development  of  the  principle  of  Ex  parte  James.^  But, 
in  my  opinion,  we  must  regard  the  funds  available  for  distribution  among 
the  creditors  under  a  bankruptcy  or  liquidation  as  one  entire  fviud,  and,  if 
that  fund  has  been  erroneously  increased,  I  think  it  is  a  just  extension  of 
Ex  parte  James  to  say  that,  out  of  any  moneys  which  may  hereafter  be  in 
the  hands  of  the  trustee  and  applicable  to  the  payment  of  dividends  to  the 
creditors,  the  amount  which  has  come  into  his  hand  by  mistake  ought  to  be 
repaid.  If  the  trustee  desires  it  the  registrar's  order  may  be  qualified  by 
saying,  that  the  repayment  is  to  be  made  out  of  any  moneys  which  may 
now  or  hereafter  be  in  the  hands  of  the  trustee  and  applicable  to  the 
payment  of  dividends. 

LixDLEY,  L.  J.  I  think  that  the  mistake  of  law  is  established,  and  the 
question  is,  whether  it  can  be  put  right  now  1  If  it  can,  it  certainly  ought 
to  be  put  right.  I  think  it  can.  The  court  by  means  of  its  officer  has 
made  a  mistake,  and  has  given  to  the  creditors  money  which  they  ought 
not  to  have  had.  It  would,  I  think,  be  unjust  to  make  the  creditors  refund 
what  they  have  thus  received.  But  what  is  there  unjust  in  saying,  that 
no  more  money  shall  go  to  them  until  this  sum  has  been  repaid  to  its 
rightful  owner?  It  appears  to  me  there  will  be  no  injustice  in  giving  such 
a  direction  to  the  trustee.  Ex 2^fir(e  inmc^^  is  an  autliority  for  doing  so, 
but,  even  without  that  authority,  I  should  have  thouglit  that  tlie  injustice 
■which  has  been  inadvertently  done  could  be  set  right. 

Appeal  distnissed. 

1  L.  R.  9  Ch.  609. 
8    . 


ii-i  CLAEKE   V.  DCTCHER.  [CIIAP.  II. 


CLARKE  V.   DUTCHER. 
In  the  Supreme  Court  of  New  York,  August,  1824. 

[Reported  in  9  Cowen,  674.] 

On  error  from  the  Court  of  Common  Pleas  of  Otsego  county.  Butcher 
sued  Clarke  on  the  8th  of  January,  1821,  by  summons,  in  a  justice's  court 
of  that  county  ;  and  declared  that  he,  Dutcher,  then  was,  and  had  been 
from  the  spring  of  1785,  in  the  possession  and  occupation  of  lot  No.  36 
containing  100  acres,  in  the  Cherry  Valley  patent,  as  a  tenant  to  Clarke,  at 
an  annual  rent  of  6c/.  sterling  an  acre,  or  £2  10,  sterling  for  the  whole  lot ; 
that  the  defendant  Clarke,  from  that  time  to  the  present  had  demanded, 
and  the  plaiutift"  Dutcher  had  been  obliged  to  pay,  and  had  paid  £4  14 
York  currency  per  year  for  the  annual  rent,  to  the  defendant,  being  about 
64  cents  more  than  the  actual  rent  reserved  on  the  lot ;  and  that  when  the 
plaintift"  took  possession,  there  was  rent  due  on  the  lot  from  1741,  which  the 
plaintiff  had  been  obliged  to  pay,  and  had  paid  at  the  same  rate ;  and  which 
was  more  than  tlie  annual  rent  reserved  on  the  lot.  The  second  count 
stated  the  same  facts,  and  added  that  the  plaintiff  paid  the  money  in  igno- 
rance of  his  own  rights.  The  third  count  was  for  the  interest  paid  by  the 
plaintiff  at  different  times  on  the  rent.  The  fourth  count  was  for  compound 
interest  paid  on  the  same  rent.  The  fifth  and  last  count  was  for  money 
lent,  money  paid,  etc.,  and  money  had  and  received  generally.  Pleas,  the 
general  issue,  also  the  statute  of  limitations  to  all  the  plaintiff's  demand 
except  for  the  last  six  years,  also  the  statute  of  limitations  to  the  whole 
demand,  also  a  set-off  for  rent  due  on  the  same  lot. 

On  the  trial  (January  18,  1821),  the  plaintiff  gave  in  evidence  a  lease 
in  fee  of  lot  36,  dated  March  10,  1755,  from  the  defendant's  ancestor 
Geo.  Clarke,  the  colonial  lieutenant-governor  of  N.  Y.,  to  one  Ramsay,  re- 
serving the  annual  rent  of  £2  10s.  sterling,  and  receipts  for  the  following 
sums,  at  the  following  dates,  as  paid  by  the  plaintiff  to  the  defendant :  July 
26,  1797,  £31  Is.  b^d.  in  full  of  arrears  to  the  29th  of  September,  1796. 
On  the  receipt  for  this  sum  was  endorsed  a  statement  of  rent  due  from 
June  15,  1767,  to  July  26,  1797  (deducting  eight  years  for  the  war),  at 
£148  Is.  Other  receipts  were  dated  February  3,  1791,  for  £4  14s. 
April  23,  1794,  for  £20.  October  29,  1796,  for  £16  14s.  .^ovember  10, 
1796,  for  £20.  (These  receipts  were  all  included  in  a  settlement  between 
the  parties  July  26,  1797.)  March  21,  1798,  for  £4  14s.  June  22,  1804, 
for  $20,  and  the  plaintiff's  bond  for  $65.10  for  6  years'  rent,  and  interest 
on  same.  July  16,  1814,  for  £32  18s.  in  full  for  rent  to  September  29, 
1813,  inclusive  ;  and  £9  2s.  5(/.  in  full  of  interest ;  and  $10  costs.  June  14, 
1815,  for  £4  14s.  rent,  and  4s.  8d  interest.    October  1,  1817,  for  $24.87  iu 


SECT.  I.]  CLARKE  V.   BUTCHER.  115 

full  for  rent  for  two  years.  January  31,  1820,  for  £9  8s.  rent  and  lis.  inter- 
est. January  8,  1821,  for  £4  1-ts.  It  was  admitted  that  on  Monday,  before 
the  trial,  the  plaintiff  sent  $16  for  rent  to  the  defendant,  which  he  refused  to 
receive,  saying  he  would  set  it  off  on  the  trial.  Judgment  for  the  plaintiff 
of  $.30,  with  costs  ;  whence  the  defendant  appealed  to  the  Common  Pleas. 

The  cause  was  tried  in  the  C.  P.  in  June,  1821.  On  the  trial,  the  plain- 
tiff proved  the  lease  in  evidence  before  the  justice,  and  that  he  had  been  in 
possession  of  the  lot  36,  for  about  30  years  claiming  under  it.  The  plain- 
tiff then  proved  the  receipts  above  set  forth,  as  in  evidence  before  the  jus- 
tice ;  and  a  witness  fur  the  plaintiff  testified,  that  allowing  all  the  rent  to 
have  been  regularly  paid  by  the  plaintiff  since  the  29th  of  September,  1796, 
at  £4  14s.  currency  per  annum,  he  would  have  overpaid  $66.48,  allowing 
all  the  rent  to  have  been  regularly  paid  by  the  plaintiff  from  the  29th  of 
September,  1796,  at  £4  14s.  currency/*^  annum. 

To  meet  the  plea  of  the  statute  of  limitations,  the  plaintiff  called  his  son 
Joseph  Dutcher,  who  testified  that  after  the  commencement  of  this  suit  in 
the  justice's  court,  the  defendant  called  on  the  plaintiff,  and  requested  to 
know  why  he  had  sent  a  summons  for  him  1  To  which  the  plaintiff  an- 
swered he  had  been  informed  that  he,  the  defendant,  had  taken  too  much 
rent  of  him;  say  four  or  five  shillings  per  year:  to  which  the  defendant  re- 
plied, "  It  has  been  an  old  custom  of  mine  to  take  so  much."  The  plaintiff 
asked  the  defendant  if  custom  made  law ;  who  said  he  did  not  know  that 
it  did  in  this  case. 

Another  witness  for  the  plaintiff  stated  that  he  had  cast  the  rent,  and 
found  overpaid  to  the  defendant  on  the  29th  of  September,  1796,  $41.56, 
deducting,  as  appeared  to  have  been  done  by  the  paper  showing  the  settle- 
ment at  that  time,  eight  years'  rent  for  the  war.  If  the  eight  years'  war 
were  allowed  the  defendant,  there  would  be  due  him  at  that  time  $47.32  ; 
but  the  witness  had  not  allowed  any  interest  on  rent  arrear.  The  defend- 
ant's general  agent,  Mr.  Morrell,  proved  a  calculation  by  himself  of  all  ar- 
rears of  rent  and  interest  except  for  eight  years  of  war,  and  of  payments  made 
to  the  defendant  up  to  July  the  16th,  1814,  and  made  due  to  the  defendant 
at  that  time  a  balance  of  £16  10s.  He/.  He  also  proved  a  calculation  on 
the  same  principles,  from  the  29th  of  September,  1814,  inclusive,  to  the  8th 
of  January,  1821,  the  time  of  the  last  payment;  and  made  the  balance  £t 
8s.  8c;.  Adding  the  £16  10s.  Ud.  made  £25  9s.  lie/.  =  $74.82  then  duo 
the  defendant.  He  stated  that  he  had  refused  a  tender  of  16  dollars  as  a 
balance  of  rent  due  the  defendant,  made  by  the  plaintiff  on  the  15th  of 
January,  1821,  after  the  suit  commenced  before  the  justice.  In  answer  to 
a  question  put  by  the  plaintiff's  counsel,  he  said  the  reason  the  defondtuit 
assigned  for  claiming  £4  14s.  currency  for  £2  10s.  sterling  reserved  by  tho 
lease  was,  that  after  the  war,  the  rate  of  exchange  being  against  this  coun- 
tr}',  his  tenants  had  agreed  to  pay  that  sum  in  consideration  that  ho  would 
deduct  eight  years'  rent  for  the  war.     That  he  did  not  exact  or  demand  it ; 


116  CLARKE   V.    DUTCHEK.  [CHAP.  II. 

but  if  the  tenants  declined  paying  it,  he  took  the  £4  8s.  IkZ.  The  witness 
further  stated,  that  in  making  up  the  balances,  as  he  had  sworn  to  them, 
he  cast  the  interest  on  the  rent  of  each  year  separately,  to  the  time  of  the 
payment ;  and  if  the  payment  at  that  time  equalled  or  exceeded  the  inter- 
est then  due,  he  added  the  interest  to  the  principal,  and  deducted  the  pay- 
ment •  but  if  the  payment  did  not  equal  the  interest,  he  cast  the  interest 
on  the  rents  to  the  time  when  the  sum  of  the  payments  equalled  or  ex- 
ceeded the  interest  then  due,  then  added  the  interest  to  the  principal,  and 
deducted  the  payments  and  the  interest  on  the  payments  from  the  princi- 
pal and  interest.  The  testimony  of  Mr.  Morrell,  explaining  one  of  the  re- 
ceipts, will  be  found  stated  in  the  opinion  of  the  court. 

The  court  below  decided,  and  so  charged  the  jury,  that  the  tender  of  the 
$16  was  not  conclusive  that  so  much  rent  was  due  to  the  defendant.  That 
the  excess  of  payments  were  not  to  be  deemed  made  in  ignorance  of  the  law, 
but  of  the  facts,  —  the  rent  being  reserved  in  sterling  money,  but  estimated 
and  paid  in  currency ;  and  that  the  action,  therefore,  would  lie  for  the  ex- 
cess, unless  barred  by  the  statute  of  limitations;  that  the  receipts  of  July 
26,  1797,  and  of  July  14,  1814,  were  evidence  that  settlements  were  then 
made,  and  that  the  parties  could  not  go  back  beyond  either  of  those 
periods,  unless  the  testimony  of  Joseph  Dutcher  should  be  deemed  sufficient 
to  take  the  case  out  of  the  statute  of  limitations ;  that  this  was  a  question 
of  foct  for  the  jury.  If  they  thought  there  was  evidence  of  an  admission 
of  indebtedness  by  Clarke,  or  a  new  promise  by  him,  they  might  go  through 
the  whole  accounts;  otherwise  not;  that  the  matters  in  evidence  on  the 
part  of  the  defendant  were  not  a  conclusive  bar  of  the  plaintiff's  action. 
To  all  these  several  decisions  the  defendant  excepted.  The  jury  found  a 
verdict  for  the  plaintiff"  with  $50  damages,  upon  which  the  C.  P.  rendered 
judgment  with  costs ;  and  the  defendant  brought  error  to  this  court. 
G.  Morrell,  for  the  plaintiff  in  error. 
I.  Seeli/e,  for  the  defendant  in  error. 

Curia,  per  Sutherland,  J.  The  demand  of  the  plaintiff  below  must  be 
limited  to  the  six  years  preceding  the  commencement  of  his  suit.  The  ad- 
mission by  Clarke  that  it  had  been  an  old  custom  of  his  to  take  four  or  five 
shillings  more  rent  than  was  reserved  in  the  lease,  is  not  sufficient  to  open 
all  the  antecedent  accounts  between  the  parties.  The  conversation  com- 
menced by  Clarke's  asking  Dutcher  why  he  had  issued  a  summons  against 
him.  From  which  it  may  be  inferred,  that  it  was  soon  after  the  issuing  of 
the  summons,  and  before  the  declaration  was  put  in  before  the  justice.  He 
could  not  then  have  known  that  Dutcher  sought  to  recover  back  any  pay- 
ment made  prior  to  the  last  six  years.  It  ought  clearly  to  appear  in  all  such 
cases,  that  the  acknowledgment  related  to  the  identical  debt  or  demand 
which  is  sought  to  be  recovered  upon  the  strength  of  it.  Sands  v.  Gelston.^ 
This  was  not  a  case  of  open  unliquidated  mutual  accounts.  The  receipt 
1  15  Johns.  511. 


SECT.  I  ]  CLARKE  V.   BUTCHER.  117 

of  July  16,  1814,  settled  all  accounts  between  the  parties  in  relation  to 
the  rent  on  lot  No.  3G,  up  to  September  29,  1813.  If  the  plaintiti'  be- 
low, upon  that  settlement,  paid  by  mistake  more  than  he  ought  to  have 
paid,  the  error  might  have  been  corrected  at  any  time  within  six  years,  and 
the  excess  recovered  back,  provided  the  mistake  was  of  a  character  by  which 
the  law  did  not  hold  him  concluded.  But  having  slept  upon  his  rights 
until  the  statute  of  limitations  has  attached,  and  having  failed  to  show  an 
acknowledgment  on  the  part  of  the  defendant  sufficient  to  take  the  case 
out  of  the  statute,  no  inquiry  can  now  be  had  into  any  accounts  between 
the  parties  in  relation  to  the  rent,  prior  to  that  settlement.' 

Where  there  is  any  dispute  as  to  the  facts  which  go  to  prove  the  making 
of  a  new  promise,  there,  whether  a  sufficient  acknowledgment  or  promise 
has  been  made  to  take  the  case  out  of  the  statute,  is  a  mixed  question  of 
law  and  fact,  to  be  passed  upon  by  the  jury.  But  when  the  facts  are  un- 
disputed, it  is  for  the  court  to  determine  whether  they  take  the  case  out  of 
the  statute  or  not.  Here  it  was  not  denied  that  Clarke  made  the  declara- 
tion relied  upon  as  evidence  of  an  acknowledgment  of  the  debt.  Whether 
it  amounted  to  a  sufficient  acknowledgment  or  not,  was  an  unmixed  ques- 
tion of  law. 

The  opinion  expressed  by  the  court  w^as  erroneous,  and  properly 
excepted  to. 

If  the  plamtiff's  demand  is  limited  to  the  period  subsequent  to  the  set- 
th^raent  of  July  IGth,  1814,  he  has  no  ground  for  a  recovery.  Since  that 
period,  there  has  been  no  final  settlement  between  the  parties.  All  the 
receipts  have  been  upon  account,  except  that  of  October  1,  1817,  given 
by  Walter  to  Webb  for  $24.87,  which  purported  to  be  in  full  for  two 
years'  rent.  Mr.  Morrell  swears  expressly  that  Mr.  Webb  had  no  authority 
to  give  a  receipt  in  full  ;  that  liis  instructions  to  his  clerks,  of  whom  AVcbl) 
was  one,  were  to  receive  any  money  which  Mr.  Clarke's  tenants  should  pay, 
and  give  receipts  on  account.  That  receipt,  therefore,  is  to  be  considered 
as  a  receipt  on  account  merely.  Now  the  rent  which  has  fallen  due  since 
September  29,  1813,  up  to  which  period  it  was  settled  by  the  receij)t  of 
July  16,  1814,  and  the  commencement  of  this  suit,  without  calculating 
any  interest,  exceeds  by  some  dollars  the  amount  paid  by  the  plaint  ill". 
Mr.  Morrell  states  tlie  balance  of  principal  and  interest  due  Mr.  Clarke, 
upon  an  accurate  calculation  upon  this  principle,  on  the  8th  day  of  January, 
1821,  when  this  suit  was  commenced,  to  have  been  $10.73.  Whether  Mr. 
Clarke,  therefore,  exacted  and  received  from  the  plaintiff  at  any  period 
more  rent  than  was  tlien  due  to  him,  is  not  the  question.  Whatever  ho 
received,  he  passed  to  the  general  credit  of  the  plaintiff;  aiid  in  this  action 
the  inquiry  is,  has  the  defendant  received  more  from  the  jjlaintifT  for  rent 
than  he  was  entitled  tol  The  evidence  clearly  .shows  that  he  has  notj 
and  the  plaintiff  below,  therefore,  is  not  entitled  to  recover. 

*  A  portion  of  the  opinion  rel.-iting  to  a  (jncstion  of  practice  has  been  omitted.  —  Ed. 


113  CLARKE  V.    BUTCHER.  [CHAP  n. 

But  it  was  said,  upon  the  argument,  that  as  more  than  $50  had  been 
paid  by  the  plaintiff  to  the  defendant  for  rent  within  six  years,  the  judg- 
ment was  supported,  whether  the  opinion  expressed  by  the  court  as  to  the 
statute  of  limitations  was  right  or  wrong.  It  is  undoubtedly  true,  that  a 
judgment  will  not  be  reversed  on  account  of  an  erroneous  opinion  expressed, 
or  decision  made  by  the  court,  where  it  clearly  appears  that  the  error  did 
not  or  could  not  have  affected  the  verdict  or  the  judgment.  But  this  very 
position  implies  that  we  are  to  look  beyond  the  letter  of  the  exception  into 
the  case  itself,  to  ascertain  what  the  effect  of  the  error  was.  Now  it  is  per- 
fectly clear  that  if  the  court  had  charged  the  jury  that  all  accounts  between 
the  parties  prior  to  the  last  six  years  were  barred  by  the  statute  of  limita- 
tions, they  could  not  have  given  a  verdict  for  the  plaintiff;  for  within  the 
last  six  years,  he  had  not  paid  as  much  as  he  owed  the  defendant ;  and  this 
point,  therefore,  properly  arises  upon  this  exception. 

But  although  this  view  of  the  case,  if  I  am  correct  in  it,  is  conclusive,  it 
may  be  well  briefly  to  consider  that  which,  upon  the  argument,  was  treated 
as  the  main  point  in  the  cause.  It  is  embraced  in  the  exception,  that  the 
payments  made  by  the  defendant  in  error  were  made  voluntarily,  with  a 
full  knowledge  of  all  the  facts  in  the  case ;  and  admitting  that  they  ex- 
ceeded the  amount  legally  due,  and  that  the  statute  of  limitations  was  out 
of  the  question,  the  excess  could  not  be  recovered  back,  the  mistake  being 
in  law  and  not  in  fact. 

Although  there  are  a  few  dicta  of  eminent  judges  to  the  contrary,  I  con- 
sider the  current  and  weight  of  authorities  as  clearlj'  establishing  the  posi- 
tion, that  where  money  is  paid  with  a  full  knowledge  of  all  the  facts  and 
circumstances  upon  which  it  is  demanded,  or  with  the  means  of  such  knowl- 
edge, it  cannot  be  recovered  back  upon  the  ground  that  the  party  supposed 
he  was  bound  in  law  to  pay  it,  when  in  truth  he  was  not.  He  shall  not  be 
permitted  to  allege  his  ignorance  of  law ;  and  it  shall  be  considered  a  vol- 
untary payment. 

This  position  was  broadly  stated  by  Buller,  J.,  in  Lowry  v.  Bourdieu,^ 
without  any  question,  or  the  expression  of  any  doubt  or  disapprobation  by 
the  rest  of  the  judges.  Although  it  is  true  that  that  case  may  have  been, 
and  probably  was  determined  on  the  ground  that  the  policy  upon  which  the 
premium  had  been  paid  was  a  gaming  policy,  that  the  parties  M'ere  in  pari 
delicto,  and  that  the  law  would  not  aid  the  plaintiff  in  recovering  back  what 
he  had  paid  under  such  circumstances ;  still  it  is  not  to  be  supposed  that 
Lord  Mansfield  and  Mr.  Justice  Ashurst  would  have  suffered  the  dictum 
to  have  passed  without  animadversion,  if  they  had  not  assented  to  its 
correctness. 

In  Knibbs  v.  Hall,'^  a  tenant  was  not  permitted  to  recover  back  from  his 
landlord,  or  to  be  allowed  by  way  of  set-off,  a  sum  of  money  which  he  had 
paid  beyond  the  rent  which  was  actually  due  from  him.  The  landlord  de- 
1  Dougl,  470.  2  1  Esp.  83. 


SECT.  I.]  CLARKE  V.   BUTCHER.  119 

manded  25  guineas,  and  threatened  him  with  a  distress  if  he  did  not  pay  it. 

The  tenant  insisted  that  he  had  taken  the  premises  at  20  guineas,  and 
offered  to  pay  that  sum ;  but  under  the  supposition  that  he  could  not  defend 
himself  against  the  distress,  paid  the  25  guineas,  and  was  not  permitted  to 
recover  back  or  set  off  the  excess,  it  being  held  a  voluntary  payment.  So 
in  Brown  v.  McKinnally,^  and  Marriott  v.  Hampton,^  the  same  principle 
was  recognized. 

In  Buller  v.  Harrison,'  the  money  was  paid  under  a  mistake  in  fact.  The 
assurer,  upon  a  representation  that  a  loss  had  been  sustained  by  one  of  the 
perils  covered  by  the  policy,  paid  the  insurance  to  the  agent  of  the  as- 
sured. But  soon  learning  that  it  was  a  "  foul  loss,"  in  the  language  of  the 
case,  he  gave  notice  to  the  agent  of  the  fact,  and  also  not  to  pay  over  the 
money.  The  only  question  discussed  in  the  case  was,  whether  in  judgment 
of  law  the  money  had  been  paid  over  by  the  agent  before  he  received  the 
notice.  The  plaintiff's  right  to  recover  against  the  principal  was  not 
questioned. 

The  case  of  Bilbie  v.  Lumley  and  others,*  was  also  an  action  by  an  under- 
writer, to  recover  back  from  the  assured  £100  which  he  had  paid  upon  the 
policy.  The  ground  on  which  the  action  was  brought  was,  that  the  money 
had  been  paid  under  a  mistake,  the  defendant  not  having  disclosed  to  the 
plaintiff,  at  the  time  the  insurance  was  effected,  a  letter  relating  to  the  time 
of  the  sailing  of  the  ship  insured,  which  it  was  admitted  was  material. 
But  it  appeared  that  before  the  loss  was  adjusted  and  the  money  paid  on 
the  policy,  all  the  papers,  including  the  letter  in  question,  were  submitted 
to  the  plaintiff.  The  counsel  for  the  plaintiff  put  his  case  on  the  broad 
ground  that  it  was  sufficient  to  sustain  the  action  that  the  money  had  been 
paid  under  a  mistake  of  the  law,  the  plaintiff  not  being  apprised  at  the  time 
of  the  payment,  that  the  concealment  of  the  particular  circumstance 
disclosed  in  the  letter  was  a  defence  to  any  action  which  might  have 
been  brought  on  the  policy.  When  the  case  was  stated  at  bar,  Lord 
Ellenbouough  would  not  hear  it  argued.  He  said  he  had  never  hoard  of 
a  case  in  which  a  party  who  had  paid  money  to  another  voluntarily,  with  a 
full  knowledge  of  all  the  facts  of  the  case,  had  been  permitted  to  recover  it 
back,  on  account  of  his  ignorance  of  the  law,  except  the  case  of  Chatfiold  v. 
Paxton  (in  a  note  to  liilbic  v.  Lumley),  in  which  Lord  Kenvon,  at  nisi 
prins,  had  dropped  an  intimation  of  that  sort.  Now,  upon  examination,  it 
will  be  found  that  in  the  case  of  Chatfield  v.  Paxton,  a  nmjority  of  the 
judges  put  the  case  upon  the  ground  that  the  payment  had  been  made  by 
the  plaintiff,  not  with  a  full  knowledge  of  the  facts,  but  only  under  a  blind 
suspicion  of  the  case.  I^ord  Ellenuouougii  says  that  it  was  so  doubtful  on 
what  point  that  case  turned,  that  it  was  not  ordered  to  be  rei)ortcd. 

In  Stevens  v.  Lynch,^  the  plaintiff  was  the  indorser,  and  the  defendant 

»  1  Esp.  279.  2  2  Esp.  .146.  »  Cowp.  565. 

*  2  Ea«t,  469.  »  12  I':a8t,  38. 


120  CLARKE   V.   BUTCHER.  [CHAP.  II 

the  drawer  of  a  bill  of  exchange.  The  defence  was,  that  the  plaintiff  had 
given  time  to  the  acceptor  after  his  dishonor  of  the  bill.  But  it  appeared 
that  the  defendant,  with  a  full  knowledge  of  that  fact,  said,  "  1  know  I  am 
liable,  and  if  Jones  (the  acceptor)  does  not  pay  it,  I  will."  The  court  say 
the  defendant  made  the  promise  with  a  full  knowledge  of  all  the  circum- 
stances, and  cannot  now  defend  himself  upon  the  ground  of  his  ignorance 
of  the  law  when  he  made  the  promise. 

The  cases  of  Chatfield  v.  Paxton  and  of  Bize  v.  Dickason,^  were  cited  for 
the  plaintiff  upon  the  argument.  But  the  court  said  they  considered  those 
cases  to  have  proceeded  on  the  mistake  of  the  person  paying  the  money 
under  an  ignorance  or  misapprehension  of  the  facts  of  the  case. 

In  the  late  case  of  Brisbane  v.  Dacres,^  this  subject  was  elaborately  con- 
sidered by  the  Court  of  Common  Pleas,  and  the  principle  of  Bilbie  v.  Lumley 
recognized  and  adopted.  Brisbane  was  the  captain  of  a  frigate  belonging 
to  a  squadron  under  the  command  of  Admiral  Dacres,  the  testator  of  the 
defendant,  upon  the  Jamaica  station  ;  and  in  obedience  to  the  orders  of  the 
admiral,  in  April,  1808,  he  received  on  board  his  frigate  $700,000  belong- 
ing to  government,  and  proceeded  with  the  same  to  Portsmouth.  He  also 
received  on  board  between  one  and  two  millions  of  dollars  belonging  to 
individuals,  to  be  delivered  at  the  Bank  of  England.  The  government  and 
individual  money  was  delivered  according  to  order,  and  Captain  Brisbane 
received  from  the  government  for  the  freight  of  the  former  £850  ;  and  from 
the  Bank  of  England,  upwards  of  £7000  for  the  freight  of  the  latter.  He 
paid  over  to  the  admiral  one  third  of  the  sums  thus  received,  under  the 
belief  that  he  was  legally  entitled  to  it ;  but  upon  discovering  that  he  was 
not,  he  brought  this  action  to  recover  it  back.  It  was  shown  to  be  the 
usage  in  the  navy  for  the  captains  of  vessels  carrying  public  and  private 
treasure,  to  pay  one  third  of  the  freight  for  the  same  to  the  commander  of 
the  squadron  to  which  they  belonged,  though  it  was  admitted  that  since 
1801  the  admiral  had  in  such  cases  no  legal  claim  to  any  portion  of  the 
allowance.  But  the  court  held  that  the  money,  having  been  paid  with  a 
full  knowledge  of  all  the  circumstances  and  facts  in  the  case,  could  not  be 
recovered  back,  because  it  had  been  paid  under  a  misapprehension  of  the 
law.  As  to  the  freight  for  the  money  belonging  to  individuals,  it  was  held 
that  Captain  Brisbane  had  no  right  to  carry  it ;  that  the  whole  of  that  part 
of  the  transaction  was  illegal ;  and  that,  the  parties  being  in  pari  delicto,  the 
law  would  aid  neither.  But  as  to  the  other  portion  of  the  demand,  it  was 
put  upon  the  broad  ground  which  I  have  stated,  against  the  opinion  of  Mr. 
Justice  CiiAMBRE.  Mr.  Justice  Gibbs  says,  where  a  man  demands  money 
of  another  as  a  matter  of  right,  and  he  pays  it  with  a  full  knowledge  of  the 
facts  xipon  which  the  demand  is  founded,  he  never  can  recover  back  the  sum 
he  has  so  voluntarily  paid.  By  submitting  to  the  demand,  he  that  pays 
the  money  gives  it  to  the  person  to  whom  he  pays  it,  and  closes  the  trans- 
1  1  T.  K.  285.  '  5  Taunt.  144. 


SECT.  I.]  CLARKE   V.   DUTCIIER.  121 

action  between  them.  He  who  receives  it  has  a  right  to  consider  it  as  his 
without  dispute;  and  it  would  be  most  mischievous  and  unjust,  if  he  who 
has  acquiesced  in  the  right  by  such  vohintarv  payment  should  be  at  liberty, 
at  any  time  within  the  statute  of  limitations,  to  rip  up  the  matter,  and 
recover  back  the  money. 

Against  these  cases  and  a  variety  of  others  in  which  the  same  principle 
is  acknowledged  with  more  or  less  distinctness,  there  is  nothing  to  oppose 
but  the  dictum  of  De  Grey,  Ch.  J.,  in  Farmer  v.  Arundel,^  and  of  Lord 
Mansfield  in  Bize  v.  Dickason.^  The  observation  of  Ch.  J.  De  Grey  is, 
that  "  When  money  is  paid  by  one  man  to  another,  as  a  mistake  either  of 
fact  or  of  law,  or  by  deceit,  an  action  will  lie  to  recover  it  back."  But  in 
that  case  the  action  was  not  sustained,  although  the  money  had  been  paid 
by  the  plaintiff  under  a  clear  mistake  of  law.  The  case,  therefore,  not  only 
did  not  call  for  the  dictum,  but  is  in  direct  hostility  with  it.  The  proposi- 
tion of  Lord  INLvNSFiELD  in  Bize  v.  Dickason  was,  that  "Where  money  is 
paid  under  a  mistake,  which  there  was  no  ground  to  claim  in  conscience, 
the  party  may  recover  it  back  in  an  action  of  assumpsit."  If  his  Lordship 
meant  mistake  in  fact,  the  proposition  is  undoubted  ;  and  that  he  did  so 
mean  and  express  himself,  Mr.  Justice  Gibbs,  in  his  opinion  in  Brisbane  v. 
Dacres,  infers  with  great  force,  from  the  circumstance  that  Lord  Mansfield 
had  six  years  before,  in  Lowry  v.  Bourdieu,  heard  it  said  by  Mr.  Justice 
BuLLER,  that  "money  paid  in  ignorance  of  the  law  could  not  be  recovered 
back,"  and  had  not  dissented  from  the  doctrine ;  and  Buller,  Justice,  sat 
by  him  in  Bize  v.  Dickason,  and  would  not  have  heard  the  contrary  of  that 
doctrine  stated  without  noticing  it.  The  only  point  to  which  the  attention 
of  the  defendant's  counsel,  in  Bize  v.  Dickason,  seems  to  have  been  directed 
was,  whether  the  case  came  within  the  principle  of  Grove  v.  Dubois;*  and 
the  court  having  expressed  an  opinion  that  it  did,  he  abandoned  the  case, 
without  adverting  to  the  distinction  that  in  Grove  v.  Dubois  the  broker  had 
been  allowed  merely  to  set  off  his  demand,  and  here  he  sought  to  recover 
back  a  sum  whicli  he  had  actually  paid. 

Chief  Justice  Mansfield,  in  Brisbane  v.  Dacres,  in  adverting  to  these 
propositions  of  Ch.  J.  De  Grey  and  Lord  Mansfield,  says,  "  It  certainly  is 
very  hard  upon  a  judge,  if  a  rule  which  he  lays  down  generally  is  to  be 
taken  up  and  carried  to  its  full  extent.  Great  caution  ouglit  to  be  used 
by  the  court  in  extending  such  maxims  to  cases  which  the  judge  who 
uttered  them  never  had  in  contemplation." 

If  money  paid  under  a  mistake  of  the  law,  though  with  a  full  knowl- 
edge of  the  facts  in  the  case,  can  be  recovered  back  in  all  cases  where  the 
party  to  whom  it  is  paid  is  not  in  conscience  and  equity  entitled  to  it,  what 
is  the  practical  distinction  between  a  mistake  in  fact  and  a  mistake  in  law. 
A  party  who  has  paid  money  under  a  mistake  in  fact  catmot  recover  it  back 
unless  he  is  equitably  entitled  to  it.     Tlic  iiKjuiry  in  every  case,  therefore, 

»  2  Black.  II.  825.  ^  i  T.  R.  285.  »  1  T.  U.  112. 


122  CLARKE   V.   BUTCHER.  [CHAP.  II. 

must  be,  not  •whether  the  money  was  paid  under  a  misapprehension  of  the 
law,  or  in  ignorance  of  the  fact,  for  that  is  immaterial,  but  wliether  the 
party  to  whom  it  was  paid  can  in  equity  and  conscience  retain  it.  If  he 
cannot,  if  there  was  any  mistake  of  any  character,  he  shall  refund. 

If  this  be  so,  why  has  this  question  been  so  frequently  and  elaborately 
discussed,  not  only  in  the  English,  but  in  our  own  courts ;  and  not  only  in 
the  courts  of  common  law,  but  in  courts  of  equity]  How  are  the  cases  of 
Eilbie  V.  Lumley  and  of  Brisbane  v.  Dacres  to  be  reconciled  with  this  prin- 
ciple 1  What  ground  of  conscience  or  equity  had  Admiral  Dacres  for  retain- 
ing the  money  paid  to  him  1  He  had  neither  incurred  hazard  nor  rendered 
any  labor  or  service  in  its  transportation.  Captain  Brisbane  was  not  his 
servant,  nor  was  the  ship  which  carried  it  his  property.  Chief  Justice 
Mansfield,  in  his  solicitude  to  avoid  collision  with  the  dicta  of  Chief  Jus- 
tice De  Grey  and  Lord  Mansfield,  does  indeed  suggest  a  ground  of  equity 
for  the  defendant.  He  says,  "  So  far  from  its  being  contrary  to  cequmn  et 
honum,  I  think  it  would  be  most  contrary  to  cequum  et  honum  if  he  were 
obliged  to  repay  it ;  for  see  how  it  is :  If  the  sum  be  large,  it  probably 
alters  the  habits  of  his  life  ;  he  increases  his  expenses ;  he  has  spent  it  over 
and  over  again  ;  perhaps  he  cannot  pay  it  at  all,  or  not  without  great  dis- 
tress." If  the  fact  of  having  expended  the  money,  or  of  its  being  incon- 
venient to  repay  it,  is  a  sufficient  ground  of  equity  to  enable  tlie  party  who 
has  received  it  under  a  mistake  of  law  to  retain  it,  I  apprehend  that  it  will 
practically  amount  to  the  same  thing  as  holding  that  it  shall  not  be  recov- 
ered back.  But  with  great  respect,  I  think  his  Lordship  might  better  have 
denied  those  dicta  to  be  law,  as  Lord  Ellenborough  did  in  Bilbie  v.  Lum- 
ley, than  to  have  sought  to  evade  them  by  this  gloss. 

Chief  Justice  Marshall  thought  there  was  a  distinction  between  a  mis- 
take in  fact  and  a  mistake  in  law,  when  he  said,  in  Hunt  v.  Rousmanier.^ 
"Although  we  do  not  find  the  naked  principle  that  relief  may  be  gi-anted, 
on  account  of  ignorance  of  law,  asserted  in  the  books,  we  find  no  case  in 
•which  it  has  been  decided  that  a  plain  and  acknowledged  mistake  in  law  is 
beyond  the  reach  of  equity."  Chancellor  Kent  thought  such  a  distinction 
existed,  when  he  said,  in  Lyon  v.  Richmond,^  "  Courts  do  not  undertake  to 
relieve  parties  from  their  acts  and  deeds  fairly  done,  on  a  full  knowledge  of 
facts,  though  under  a  mistake  of' the  law.  Every  man  is  to  be  charged  at 
his  peril  with  a  knowledge  of  the  law;  there  is  no  other  principle  which  is 
safe  or  practicable  in  the  common  intercouree  of  mankind."  The  principle 
upon  which  courts  refuse  to  relieve  against  mistakes  in  law  is,  that  in  judg- 
ment of  law  there  is  no  mistake ;  every  man  being  held,  for  the  wisest  rea- 
son, to  be  cognizant  of  the  law.  The  act,  therefore,  against  which  the  party 
seeks  relief  is  his  own  voluntary  act,  and  he  must  abide  by  it.  This  prin- 
ciple steers  entirely  clear  of  the  conscience  or  equity  of  the  transaction. 

In  this  case,  therefore,  the  rent  having  been  reserved  in  sterling  money, 
1  8  Wheat.  215.  *  2  Johns.  51. 


SECT.  l]  HAVEN   r.    FOSTER.  123 

aud  its  value  in  our  currency  being  fixed  by  statute,  and  therefore  a  ques- 
tion of  law,  if  the  plaintiff,  on  settling  his  rent  at  the  rate  of  .£4  14s.  cur- 
rency for  £2  10s.  sterling,  acted  under  an  erroneous  impression  that  that 
was  its  legal  value,  he  cannot  now  recover  back  the  excess.  The  rent  was 
demanded  by  the  landlord  as  his  right.  By  submitting  to  the  demand,  as 
Mr.  Justice  Gibbs  expressed  it,  he  gives  the  money  to  the  party  to  whon\ 
he  pays  it,  and  closes  the  transaction  forever.  The  judgment  of  the  Com- 
mon Pleas  must  be  reversed. 

Judgment  of  reversal. 


HAVEN  V.   FOSTER. 

In   the    Supreme    Judicial   Court   of   Massachusetts,   October   Term, 

1829. 

[Reported  in  9  Pickerinfj,  112.] 

Assumpsit  for  money  had  and  received,  and  money  paid.  The  parties 
stated  a  case. 

On  the  19th  of  September,  1819,  Andrew  Craigie,  of  Cambridge  in  this 
Commonwealth,  died  there,  intestate,  seised  in  fee-simple  of  certain  land  in 
the  State  of  New  York,  and  of  real  estate  of  greater  value  in  Massachusetts, 
leaving  his  niece  Elizabeth,  the  wife  of  the  plaintiff,  and  his  three  nephews, 
Andrew  Foster,  John  Foster,  and  the  defendant,  his  heirs-at-law,  tlie  niece 
being  the  child  of  the  intestate's  sister  Elizabeth,  and  the  nephews  the 
children  of  his  sister  Mary,  and  all  four  being  children  of  the  same  father, 
Bossenger  Foster. 

In  October,  1819,  administration  upon  the  estate  of  Craigie  was  granted 
in  this  Commonwealth  to  his  widow.  No  letters  of  administration  were 
taken  out  in  New  York. 

After  the  death  of  Craigie,  the  plaintiff  and  his  wife,  with  Andrew  and 
John  Foster  and  the  defendant,  by  their  joint  deed  of  release  and  quitclaim, 
dated  November  17,  1821,  conveyed  all  their  right  to  the  greater  part  of 
the  intestate's  land  in  New  York  to  Thomas  Tufts,  of  Lc  Koy,  in  tiiat 
State,  for  the  consideration  in  fact  of  $24,540,  Tufts  well  knowing  the  nature 
of  the  title  he  acquired  by  this  purchase.  The  deed  was  executed  and 
acknowledged  at  Cambridge,  and  by  agreement  of  the  parties  was  carried 
by  the  plaintiff  to  Albany  in  the  State  of  New  York,  where,  on  December  1, 
1821,  Tufts  executed  a  bond  of  that  date  to  each  of  the  grantors,  for  one 
quarter  part  of  the  consideration  of  the  deed,  payable  by  certain  instal- 
ments, with  interest  semi-annually  at  the  rate  of  seven  per  cent,  the  legal 
rate  of  interest  in  New  York,  which  bonds  were  secured  by  four  several 
mortgages,  each  of  one  undivided  fourth  part  of  the  lands  conveyed  to 
Tufts.     The  deed   and  bonds   were   placed    by  the    plaintiff,  but   without 


124  HAVEN   V.    FOSTER.  [CHAP.  II. 

express  authority  from  the  other  grantors,  in  the  hands  of  J.  V.  Henry,  a 
lawyer  at  Albany,  with  directions,  upon  the  receipt  of  the  mortgages  exe- 
cuted and  recorded,  to  transmit  the  deed  to  Tufts,  and  the  bonds  and 
mortgages  to  the  respective  obhgees  and  mortgagees  therein  named.  The 
bonds  and  mortgages  were  sent  by  Henry  to  the  plaintiff,  who  delivered 
them  to  the  several  parties  in  whose  names  they  were  taken. 

On  the  9th  of  March,  1824,  the  whole  amount  of  the  bonds  was  paid  to 
the  obligees  respectively,  deducting  from  each  the  sum  of  $1,875,  which 
was  left  in  the  hands  of  Tufts  for  the  purpose  of  paying,  and  with  which 
he  undertook  to  pay,  a  debt  of  $7,500,  due  from  Craigie's  estate  to  Benjamin 
Lee;  which  debt  arose  out  of  a  contract,  dated  April  19,  1819,  between 
Craigie  and  Lee,  for  the  loan  of  $15,000  by  Lee  to  Craigie,  which  Craigie 
■was  to  receive  from  Lee  progressively,  as  stated  in  the  contract.     This 
contract  was  accompanied  by  a  note  for  $15,000  made  by  Craigie  to  Lee, 
secured  by  a  mortgage  of  part  of  the  lands  released  by  Craigie's  heirs  to 
Tufts.     Craigie  received  $4,957  under  this  contract  and  the  administratrix 
received  $2,235,  which  sums,  with  interest  to  June  15,  1820,  amounted  to 
$7,500;  and  by  an  agreement  dated  July  17,  1820,  the  intended  loan  was 
reduced  to  that  sum;  which  was  to  carry  interest  from  June  15,  1820.     At 
the  time  when  Tufts  undertook  to  pay  this  debt,  Lee's  right  of  action  on 
the  note,  against  the  administratrix,  was  barred  by  Stat.  1791,  c.  28,  limit- 
ing suits  against  administrators  to  four  years.     By  an  arrangement  between 
the  administratrix  and  the  heirs  of  Craigie,  made  in  September,  1822,  by 
virtue  of  which    certain    stock    in  this  Commonwealth   belonging  to  the 
intestate's  estate  came  under  the  control  and  management  of  the  heirs,  it 
was  stipulated,  that  among  other  claims  the  debt  to  Lee,  of  $7,500,  should 
be  paid  out  of  the  proceeds  of  the  stock  when  sold ;  but  the  sale  not  having 
been  effected  at  the  time  when  Tufts  proposed  to  make  the  before-recited 
payments  to  the  plaintiff  and  John  and  Andrew  Foster  and  the  defendant, 
it  was  then  further  agreed  between  them  and  the  administratrix,  that  the 
payment  by  them  of  the  debt  to  Lee  should  have  the  same  effect  upon  the 
rights  of  the  parties  in  interest,  as  if  it  had  been  paid  by  her  as  adminis- 
tratrix, it  not  being  then  certain  that  the  personal  estate  of  the  intestate 
would  be  sufficient  to  pay  his  debts.     Tufts  did  not  pay  Lee  any  part  of 
the  debt,  and  in  consequence  of  his  neglect,  Lee  resorted  to  his  remedy  on 
his  mortgage,  and  in  pursuance  of  a  decree  in  chancery  in  New  York,  satis- 
fied the  debt  and  costs  by  a  sale  of  about  half  of  the  mortgaged  premises. 
Before  Lee  obtained  the  decree,  he  had  agreed  with  the  plaintiff  and  John 
and  Andrew  Foster  and  the  defendant,  that  for  the  satisfaction  of  his  debt, 
he  would  resort  only  to  Tufts  and  the  land  mortgaged,  and  would  refund 
the  interest  paid  on  the  note  by  the  administratrix  subsequently  to  the 
provision  made  for  the  payment  of  the  debt  through  Tufts,  —the  plaintiff 
and  John  and  Andrew  Foster  and  the  defendant  agreeing  that  Lee  might 
use  the  bond  taken  by  them  from  Tufts  for  the  payment  of  the  debt  to 


SECT.  I.]  HAVEN   V.    FOSTER.  125 

Lee,  and  the  judgment  recovered  by  them  thereon  against  the  surety  ; 
which  bond,  and  a  copy  of  the  judgment,  were,  about  three  yeai's  after  the 
9th  of  March,  1824,  transmitted  to  Lee;  and  his  attorney,  on  receiving  on 
the  bond  and  judgment,  from  the  executrix  of  the  last  will  of  the  surety, 
the  amount  of  interest  refunded  by  Lee  to  the  estate  of  Craigie,  and  the 
costs  of  the  suit  on  the  bond,  release.l  the  judgment ;  and  Lee  never  made 
any  other  use  of  the  bond  and  judgment,  before  the  same  were  so  released. 
On  the  9th  of  March,  1824,  the  defendant  received  from  Tufts  the  sum  of 
$5,161.38  in  full  for  the  principal  secured  by  his  bond,  and  the  interest 
thereon  to  the  6th  of  that  month,  and  the  further  sum  of  819.12  for 
compound  interest  thereon,  making  in  the  whole  the  sum  of  $5,180.50, 
after  deducting  $1,875,  as  before  mentioned.  The  sum  received  has  not 
been  productive  during  the  whole  time  since  the  9th  of  March,  1824,  and 
the  defendant  has  received  thereon  for  interest  to  the  9th  of  October,  1828, 
only  $999.18. 

On  the  29th  of  May,  1826,  the  plaintiff  and  his  wife,  with  John  and 
Andrew  Foster  and  the  defendant,  by  their  joint  deed  of  release  and  quit- 
claim of  that  date,  conveyed  all  their  right  in  another  parcel  of  land  in 
the  State  of  Xew  York,  of  which  Craigie  died  seised  in  fee  simple,  to  David 
Lane  of  Hudson  in  that  State,  a  part  (.$950)  of  the  consideration  of  which 
was  paid  on  that  day  and  divided  equally  between  the  plaintiff  and  John 
and  Andrew  Foster  and  the  defendant;  one-fourth  of  which  sum  remains 
still  in  the  defendant's  hands. 

The  statute  of  New  York  of  February  23,  1786,  regulating  descents, 
■was  in  force  at  the  time  of  Craigie's  decease,  according  to  which  the  children 
of  his  two  sisters  took  per  stirpes  and  not  per  capita :  but  of  this  statute 
all  the  parties  interested  in  the  estate  of  Craigie  were  ignorant  at  the  time 
of  the  transactions  before  recited. 

If  upon  these  facts  the  court  should  be  of  opinion  that  the  plaintiff  was 
entitled  to  recover,  judgment  was  to  be  rendered  for  him  for  such  sum  as 
the  court  should  order ;  otherwise  the  plaintiff  was  to  become  nonsuit. 

The  case  was  argued  in  writing. 

Metcalf  for  the  plaintiff. 

A.  Ililliard  for  the  defendant. 

The  opinion  of  the  court  was  drawn  up  by 

Morton,  J  [After  stating  some  of  the  facts.]  By  the  statute  of  dis- 
tributions of  this  State  these  heirs,  standing  in  the  same  degree  of  relation- 
ship to  the  intestate,  inherited  his  estate  in  equal  proportions.  But  by  the 
statute  of  Xew  York,  which  carries  the  doctrine  of  representation  fiirtlicr 
than  the  law  of  this  State,  or  indeed  than  the  civil  or  common  law,  these 
heirs  inherited  per  stirpes  and  not  per  c.ajiita.  So  that  the  estate  in  New 
York  descended,  one-half  to  the  wife  of  the  ])laintifT,  and  the  otiier  half 
to  the  defendant  and  his  two  brothers;  being  one-sixtli  instead  of  ono- 
quartcr  to  each. 


126  HAVEN   V.    FOSTER.  [CHAP.  11. 

Of  the  provisions  and  even  existence  of  this  statute,  all  the  heirs  were 
entirely  ignorant  during  the  whole  of  the  transactions  stated  in  the  case. 
The  plaintiff,  having  discovered  the  mistake,  now  seeks  by  this  action  to 
reclaim  of  the  defendant  one-third  of  the  amount  received  by  him  on 
account  of  the  sale  of  the  New  York  lands,  with  interest  from  the  time  of 
its  receipt.  And  the  question  now  submitted  to  our  decision  is,  whether 
he  is  entitled  to  a  repetition  of  the  whole  or  any  part  of  this  amount. 

Had  the  parties  been  informed  of  their  respective  rights  under  the  laws 
of  New  York,  it  cannot  be  doubted  that  the  plaintiff  would  have  retained 
one  moiety  of  the  land  in  that  State,  or  would  have  received  to  himself 
one-half  of  the  consideration  for  which  it  was  sold.  The  distribution  of 
the  avails  of  the  sale  was  made  by  the  heirs  upon  the  confident  though 
mistaken  supposition,  that  they  were  equally  entitled  to  them.  They  rcted 
in  good  faith,  upon  a  full  conviction  that  they  were  equal  owners  of  the 
estate.  It  turned  out,  however,  to  the  surprise  of  all  of  them,  that  they 
owned  the  estate  in  very  unequal  proportions,  and  that  the  defendant  and 
his  brothers  had  received  not  only  the  price  of  their  own  estate,  but  also 
the  price  of  a  part  of  the  plaintiff's  estate. 

Equity  would  therefore  seem  to  require,  that  the  defendant  should  restore 
to  the  plaintiff  the  amount  received  for  the  plaintiff's  estate.  It  was  re- 
ceived by  mistake,  and  but  for  the  mistake  would  not  have  come  to  the 
defendant's  hands.  If  the  whole  estate  had  been  owned  by  the  plaintiff, 
and  the  defendant,  having  no  interest  in  it,  had  received  the  whole  consid- 
eration, the  equitable  right  of  repetition  would  have  been  no  stronger ;  it 
might  have  been  more  manifest. 

The  suggestion  that  the  provisions  of  the  New  York  statute  are  in 
themselves  inequitable,  is  no  answer  to  this  view  of  the  case.  Whether 
the  law  of  descent  in  that  State  is  more  or  less  reasonable  and  just  than 
ours,  it  is  neither  our  province  nor  desire  to  inquire.  All  statutes  regulating 
the  descent  and  distributions  of  intestate  estate  may  be  considered  as 
positive,  and  in  some  degree,  arbitrary  rules.  And  when  a  person,  by 
inheritance  or  purchase,  becomes  lawfully  seised  of  any  estate  without  fraud 
or  fault  on  his  part,  it  would  be  as  inconsistent  with  sound  ethics,  as  with 
sound  law,  to  devest  him  of  it  because  the  rule  of  law  by  which  he  held  it 
was  deemed  unreasonable.  And  if,  by  accident  or  mistake,  another  should 
get  possession,  it  is  not  easy  to  see  upon  what  principle  he  would  be  justified 
in  retaining  it. 

In  the  case  at  bar,  the  division  of  the  consideration  money  was  made 
by  the  agreement  of  all  the  parties  interested.  The  defendant  received 
the  money  with  the  plaintiff's  consent.  But  it  was  an  implied,  rather 
than  express  agreement. 

The  defendant  also  received  the  money  under  a  claim  of  right.  The  de- 
fendant believed  himself  to  be  legally  and  equitably  entitled  to  one-quarter 
part  of  the  proceeds  of  the  sale.     And  under  this  belief  he  claimed  it  as 


SECT.  I.]  HAVEN   V.   FOSTER.  127 

being  rightfully  due  to  him,  and  the  plaintiff,  uuder  the  influence  of  the 
same  belief,  assented  to  the  justice  of  the  claim,  and  agreed  to  the  equal 
distribution  which  was  made. 

It  was  not  however  paid  to  the  defendant  by  way  of  compromise.  No 
controversy  existed  between  the  parties.  There  was  not  even  a  diftereuce 
of  opinion  between  them  in  relation  to  their  respective  purparties  in  the 
estate  before  it  was  sold,  or  to  the  apportionment  of  the  avails  after  the  sale. 
There  was  therefore  no  room  for  concession  on  the  one  side  or  the  other, 
and  nothing  between  them  which  could  be  the  subject  of  compromise. 

Nor  do  the  facts  furnish  any  ground  to  presume  that  the  plaintiff'  intended 
to  grant  anything  to  the  defendant,  or  to  yield  any  of  his  legal  rights. 
Ntmo  x>r€sumitur  donare.  And  we  have  no  reason  to  believe  that  the 
plaintiff  intended  to  give  away  any  part  of  his  own  property,  or  his  wife's 
inheritance. 

The  mistake  in  the  distribution  of  the  consideration  money  for  which  the 
land  was  sold,  arose  from  the  mutual  ignorance  of  the  law  of  descents  m 
New  York.  Can  this  mistake  be  corrected  and  the  plaintiff  be  restored  to 
the  rights  which  he  had  uuder  this  statute  ? 

It  is  iu  the  first  place  objected,  that  the  plaintift"s  ignorance  was  owing 
to  his  own  negligence ;  that  he  shall  not  be  allowed  to  take  advantage  of 
his  own  laches ;  that  what  a  man  may  learn  with  proper  diligence,  he  shall 
be  presumed  to  know  ;  and  that  against  mistakes  arising  from  negligence, 
even  a  court  of  equity  will  not  relieve. 

In  all  civil  and  criminal  proceedings  every  man  is  presumed  to  know  the 
law  of  the  land,  and  whenever  it  is  a  man's  duty  to  acquaint  himself  with 
facts,  he  shall  be  presumed  to  know  them.  But  this  doctrine  does  not 
apply  to  the  present  case.  It  was  not  the  duty  of  the  plaintiff  to  know 
the  laws  of  New  York,  uor  does  ignorance  of  them  imply  negligence. 
Knowledge  cannot  be  imputed  to  the  plaintiff,  and  it  is  expressly  agreed 
that  he,  as  well  as  the  defendant,  was  entirely  ignorant  of  the  statute  of 
New  York.  Besides,  it  was  as  much  the  duty  of  the  defendant  as  of  the 
plaintiff,  to  be  acquainted  with  the  laws  of  New  York.  And  if  either  is 
guilty  of  negligence,  both  are,  in  this  respect,  in  pari  delicto. 

The  objection  that  the  title  to  real  estate  cannot  be  tried  iu  this  form  of 
action,  cannot  avail  the  defendant ;  because  it  seems  to  us  very  clear,  that 
no  title  is  or  can  be  drawn  in  question,  in  the  present  case. 

The  principal  objection  to  the  plaintiff's  recovery,  and  the  one  most 
relied  upon  by  the  defendant's  counsel,  is,  that  the  payment  to  the  defend- 
ant was  made  through  misapprehension  of  the  law,  and  therefore  that  tko 
money  cannot  be  reclaimed. 

It  is  alleged,  that  to  allow  the  plaintiff  to  recover  in  the  present  action, 
would  be  to  disregard  the  common  presumption  of  a  knowledge  of  the  law, 
and  to  violate  the  wholcjsome  and  necessary  maxim  Ignorautia  Jxrls  '/uod 
quisque    tenetur   scire,  veminem  excusat.     This  objection  has  been  strongly 


128  HAVEN    V.    FOSTER.  [CHAP.  II. 

urged  by  the  defendaut's  counsel,  and  learnedly  and  elaborately  discussed 
by  the  counsel  on  both  sides.  It  is  believed  that  all  the  authorities  appli- 
cable to  the  point,  from  the  civil  as  well  as  the  common  law,  have  been 
brought  before  the  court. 

Whether  mouey  paid  through  ignorance  of  the  law  can  be  recovered 
back,  is  a  question  much  vexed  and  involved  in  no  inconsiderable  perplexity. 
We  do  not  court  the  investigation  of  it,  and  before  attempting  its  solution, 
it  may  be  well  to  ascertain,  whether  it  is  necessary  to  the  decision  of  the 
case  before  us. 

That  a  mistake  in  fact  is  a  ground  of  repetition,  is  too  clear  and  too  well 
settled  to  require  argument  or  authority  in  its  support. 

The  misapprehension  or  ignorance  of  the  parties  to  this  suit  related  to 
a  statute  of  the  State  of  !Xew  York.  Is  this,  in  the  present  question,  to 
be  considered  fact  or  law  1 

The  existence  of  any  foreign  law  must  be  proved  by  evidence  showing 
what  it  is.  And  there  is  no  legal  presumption  that  the  law  of  a  foreign 
state  is  the  same  as  it  is  here.  2  Stark.  Ev.  (Metcalf's  Ed.)  568;  Male  v. 
Roberts.^  If  a  foreign  law  is  unwritten,  it  may  be  proved  bj-  parol  evidence ; 
but  if  written,  it  must  be  proved  by  documentary  evidence.  Kenny  v. 
Clarkson  ;  ^  Frith  v.  Sprague  ;  ^  Consequa  v.  Willings.*  The  laws  of  other 
States  in  the  union  are  in  these  respects  foreign  laws.  Eaynham  v. 
Canton.^ 

The  courts  of  this  State  are  not  presumed  to  know  the  laws  of  other 
States  or  foreign  nations,  nor  can  they  take  judicial  cognizance  of  them, 
till  they  are  legally  proved  before  them.  But  when  established  by  legal 
proof,  they  are  to  be  construed  by  the  same  rules  and  to  have  the  same 
effect  upon  all  subjects  coming  within  their  operation,  as  the  laws  of  this 
State. 

That  the  lex  loci  rei  sitce  must  govern  the  descent  of  real  estate,  is  a 
principle  of  our  law  with  which  every  one  is  presumed  to  be  acquainted. 
But  what  the  lex  loci  is,  the  court  can  only  learn  from  proof  adduced  before 
them.  The  parties  knew,  in  fact,  that  the  intestate  died  seised  of  estate 
situated  in  the  State  of  Xew  York,  They  must  be  presumed  to  know  that 
the  distribution  of  that  estate  must  be  governed  by  the  laws  of  New  York. 
But  are  they  bound,  on  their  peril,  to  know  what  the  provisions  of  these 
laws  are  1  If  the  judicial  tribunals  are  not  presumed  to  know,  why  should 
private  citizens  be  ]  If  they  are  to  be  made  known  to  the  court  by  proof, 
like  other  facts,  why  should  not  ignorance  of  them  by  private  individuals 
have  the  same  effect  upon  their  acts  as  ignorance  of  other  facts  ]  Juris 
ignorantia  est,  cnm  jus  nostrum  ignorarmis,  and  does  not  extend  to  foreign 
laws  or  the  statutes  of  other  States. 

AVe  are  of  opinion,  that  in  relation  to  the  question  now  before  us,  the 

1  3  Esp.  163.  2  1  Johns.  385.  «  14  Mass.  455. 

*  Pet.  C.  C.  229.  5  3  pi^k.  293. 


SECT.  I.]  HAVEN   V.   FOSTER.  129 

statute  of  New  York  is  to  be  considered  as  a  fact,  the  ignorance  of  which 
may  be  ground  of  repetition.  And  whether  ignorantia  legis  furnishes  a 
similar  ground  of  repetition,  either  by  the  civil  law,  the  law  of  England, 
or  the  law  of  this  Commonwealth,  it  is  not  necessary  for  us  to  determine. 
The  examination,  comparison,  and  reconciliation  of  all  the  conflicting  dicta 
and  authorities  on  this  much  discussed  question  is  a  labor  which  we  have 
neither  leisure  nor  inclination  to  undertake. 

In  the  view  which  we  have  taken  of  this  case,  it  appears  that  the  de- 
fendant received  a  part  of  the  consideration  for  which  the  plaintiff's  estate 
was  sold;  that  it  was  received  by  mistake;  and  that  this  mist;ike  was  in  a 
matter  of  fact.  He  therefore  has  in  his  hands  money  which  ex  (pqno  et  bono 
he  is  bound  to  repay,  and  there  is  no  principle  of  law  which  interposes  to 
prevent  the  recovery  of  it  out  of  his  hands. 

The  action  for  money  had  and  received,  which  for  its  equitable  properties 
is  ever  viewed  with  favor,  is  the  proper  remedy  for  its  repetition.  Th« 
mode  in  which  the  payment  was  originally  secured  by  bond  and  mortgage 
forms  no  objection  to  the  recovery,  inasmuch  as  the  money  was  in  fact  paid 
before  the  action  was  commenced.  The  plaintiff's  remedy  will  extend  to 
all  the  money  actually  received  by  the  defendant  beyond  his  legal  proportion 
of  the  estate.  Whether  it  shall  extend  further,  is  a  question  involved  m 
some  difficulty. 

The  estate  in  New  York,  at  the  decease  of  the  intestate,  was  under 
mortgage.  This  mortgage  was  satisfied  from  the  estate  itself,  and  the 
amount  thus  paid  deducted  from  the  consideration  money.  The  plaintiff 
now  contends  that  this  incumbrance  ouglit  to  have  been  removed  by  a 
payment  from  the  personal  estate,  or  if  that  was  insufficient,  from  the  real 
estate  in  this  Commonwealth. 

In  the  consideration  of  this  question,  it  must  not  be  forgotten  that  the 
plaintiff  can  recover  only  what  in  equity  and  good  conscience  is  due  to  him. 
What  descended  to  tlie  heirs  in  New  York  ?  The  estate  there,  not  free 
from  all  incumbrances,  but  with  this  mortgage  upon  it.  Did  equity  require 
that  the  defendant  and  his  brothers  should  advance  three-fourths  of  the 
money  to  pay  off  this  mortgage,  that  the  plaintiff  might  have  one-half  the 
estate  increased  in  value  by  tliis  payment] 

The  mortgagee  relied  entirely  upon  his  lien  on  the  estate  ;  otherwise  he 
would  have  demanded  payment  of  the  administratrix,  and  sought  a  remedy 
against  her  upon  the  personal  security  of  the  intestate.  This  he  omitted 
to  do  until  the  claim  w.as  barred  by  the  statute  of  1791,  c.  28.  The  only 
sure  remedy  then  remaining  was  upon  his  mortgage.  This  remctiy  lie 
resorted  to,  and  obtained  from  the  land  mortgaged  satisfaction  of  his  debt, 
by  a  sale  of  part  of  it  according  to  the  laws  of  New  York. 

It  is  true  that  before  this  claim  against  the  estate  was  barred  by  tlio 
statute  of  limitations,  the  heirs  agreed  with  the  administratrix  that  the 
debt  should   be   paid   out  of  tlie   proceeds  of  a  sale  of  certain  corporate 


130  HAVEN  V.   FOSTER.  [CHAP.  II. 

stock.  But  the  stock  was  not  sold  so  as  to  make  the  payment,  and  after 
the  demand  was  barred  the  heirs  made  an  agreement  with  tlie  purchaser 
of  their  estate  in  New  York,  that  he  should  retain  enough  of  the  considera- 
tion which  was  then  due  to  them  to  remove  this  incumbrance,  deductino; 
an  equal  amount  from  each  bond.  After  the  deduction  of  this  amoimt 
from  the  bonds,  the  balances  were  paid  to  the  obligees,  and  thus  the 
bonds  were  satisfied  and  discharged.  The  effect  of  this  arrangement  by 
the  heirs  was,  to  leave  the  estate  in  the  hands  of  the  purchaser  in  the 
same  situation  it  would  have  been  had  it  been  sold  subject  to  this 
incumbrance. 

It  must  be  presumed  that  the  heirs  stipulated  to  remove  the  incumbrance 
or  to  furnish  the  purchaser  with  the  means  of  doing  it.  If  this  was  not 
the  case,  they  voluntarily  agreed  to  relinquish  a  part  of  the  purchase-money. 
In  this  event  it  was  equivalent  to  a  reduction  of  the  price  of  the  estate, 
and  the  plaintiff  can  have  no  claim  to  any  more  than  one-half  of  the  price 
which  was  finally  agreed  upon  and  actually  paid. 

If  the  heirs  agreed  to  pay  off  this  mortgage,  it  was  a  part  of  the  agree- 
ment that  it  should  be  paid  out  of  a  particular  fund.  As  this  agreement 
was  made  by  the  plaintiff  under  the  mistaken  supposition  that  he  owned 
but  a  quarter,  when  in  fact  he  owned  half  of  it,  he  claims  to  be  relieved 
from  its  operation.  If  the  agreement  is  invalid  in  part,  it  must  be  so  in 
the  whole.  The  plaintiff  cannot  be  released  from  it  and  the  defendant  be 
bound  by  it.  If  the  plaintiff*  with  a  knowledge  of  his  rights,  would  not 
have  agreed  to  pay  out  of  this  fund ;  so  the  other  heirs,  with  the  same 
knowledge,  would  not  have  agreed  to  pay  at  all.  They  would  have  relied 
upon  their  statute  bar,  and  left  the  mortgagee  to  his  remedy  on  the  mort- 
gaged estate  and  their  grantee  to  his  remedy  against  his  grantors  or  m 
resisting  payment  of  his  bonds. 

Although  this  agreement  was  founded  in  misapprehension,  yet  as  it  was 
made  in  good  faith  and  has  been  executed,  as  the  parties  cannot  be  restored 
to  the  situation  they  were  in  when  it  was  made,  and  as  the  effect  of  annul- 
ling it  as  to  one  would  be  manifest  injustice  to  the  other,  we  can  see  no 
good  reason  why  both  should  not  be  boimd  by  it.^ 

Upon  a  view  of  the  whole  case,  it  is  the  opinion  of  the  court,  that  the 
plaintiff  recover  one-third  of  the  whole  amount  received  by  the  defendant 
on  account  of  the  sale  of  lands  in  New  York,  with  interest  from  the  service 
of  the  writ. 

^  A  portion  of  the  opinion  not  relating  to  the  q^uestion  of  mistake  has  been 
omitted.  —  Ed. 


SECT.  I.]  CLAFLIN  V.    GODFREY.  131 

JOHN   CLAFLIX,   Jr.    v.    WILLIAM   GODFREY. 
In  the  Supreme  Judicial  Court  of  Massachusetts,  October  Term,  1838, 

\Reported  in  21  Pickering,  1.] 

Assumpsit  to  recover  the  sum  of  $1722.77,  with  interest  from  June  17, 
1833. 

The  plaintiff  proved,  that  on  April  4,  1828,  Stephen  R.  Parkhurst, 
Nathan  Parkhurst,  and  Parmenas  P.  Parkhurst,  copartners  under  the  firm 
of  Stephen  R.  Parkhurst  &  Co.,  made  their  promissory  note  to  John  Farnum, 
in  the  sum  of  $4500,  and  at  the  same  time  executed  and  delivered  to  him, 
as  security  for  the  note,  a  mortgage  of  real  estate,  by  them  owned,  situate 
in  Milford.  The  real  estate  was  then  subject  to  two  mortgages,  one  to 
D.  Waldo,  to  secure  the  payment  of  $200,  the  other  to  R.  Waldo,  to  secure 
the  payment  of  $1000. 

On  July  3,  1830,  Stephen  R.  Parkhurst,  in  behalf  of  himself  and  Nathan 
and  Parmenas,  agreed  with  Farnum,  in  lieu  of  the  note  for  $4500,  to  deliver 
to  him,  within  six  months,  4000  yards  of  satinet,  and  to  give  him  security 
therefor;  and  in  pursuance  of  this  agreement  Stephen  procured  Claflin,  the 
plaintiff,  to  give  his  note  to  Farnum  for  the  satinet.  Farnum  thereupon 
transferred  to  the  plaintiff  the  note  for  $4500,  by  indorsing  it  without 
recourse  to  himself,  and  at  the  same  time  assigned  to  the  plaintiff  the 
mortgage  given  as  collateral  security  for  the  note.  Before  the  5tli  of 
November  then  next,  Parkhurst  k,  Co.  paid  the  note  given  by  the  plaintiff 
to  Farnum,  and  afterwards,  on  or  before  that  day,  delivered  the  same  to 
Godfrey,  the  defendant. 

On  the  same  5th  of  November,  Parkliurst  k  Co.  and  the  defendant  had 
a  reference  of  various  matters  between  them,  the  phiiutitf  being  one  of  tiie 
arbitrators ;  and  upon  the  hearing  before  the  arbitrators  it  was  ascertained 
and  admitted,  among  other  things,  that  the  defendant  was  then  liable  as 
surety  for  Parkhurst  k  Co.  to  the  Mendon  Bank,  for  the  sum  of  $4000,  on 
a  note  made  by  Parkhurst  &  Co.  as  principals,  and  the  defendant  and  one 
Ithiel  Parkhurst  as  sureties;  and  that  there  was  due  to  the  defendant  from 
Parkhurst  &  Co.  the  sum  of  $1801.00.  The  defendant  had  other  claims 
against  l*arkhurst  &  Co.,  and  was  under  other  liabilities  on  their  account, 
as  security  for  which  he  held  two  mortgages. 

At  the  hearing  before  the  arbitrators,  the  defendant  produced  the  note 
given  by  the  plaintiff  to  Faniuni,  and  it  was  stated  by  Stephen  R.  Parkhurst 
and  the  defendant,  before  the  arbitrators,  the  plaintiff  being  present  and' 
hearing  the  statement,  that  tlie  satinet  with  which  Parkhurst  «k  Co.  had" 
paid  Farnum,  was  made  of  wool  furnished  by  the  defendant  under  a  certain 


132  CLAFLIN   V.   GODFREY.  [CIIAP.  II. 

contract,  dated  March  6,  1830,  and  that  therefore  the  defendant  was  to 
have  the  benefit  of  the  mortgage  made  to  Farnum.  Stephen  then  agreed 
•w'ith  the  defendant,  that  the  note  given  by  the  plaintiff  to  Farnum  should 
be  given  up  by  the  defendant  to  the  plaintiff,  and  that  the  note  and  mort- 
gage for  $4500,  should  1x3  assigned  by  tfie  plaintiff  to  the  defendant,  to  be 
held  by  the  defendant  as  further  security  on  account  of  his  claims  and 
liabilities ;  and  thereupon  the  plaintiff,  upon  receiving  his  note  from  the 
defendant,  transferred  to  the  defendant  the  note  and  mortgage  for  $4500, 
indorsing  the  note  without  recourse. 

After  the  arbitrators  had  made  their  award,  they  were  requested  to 
apportion  the  several  claims  and  liabilities  of  the  defendant,  upon  and 
among  the  three  mortgages  held  by  him,  and  in  compliance  with  such 
request  they  directed,  that  he  should  hold  the  Farnum  mortgage  to  indem- 
nify him  against  his  liability  as  surety  on  the  note  for  $4000  to  the  Mendon 
Bank,  and  as  security  for  the  payment  of  $75 G,  part  of  the  sum  found  due 
to  him  on  account.  He  thereupon  agreed  to  hold  the  Farnum  mortgage 
for  that  pxirpose  and  no  other,  and  gave  a  bond  to  Stephen  to  that  effect. 
On  November  12,  1831,  the  defendant  transferred  the  note  and  mortgage 
for  $4500,  to  the  Mendon  Bank,  to  be  held  by  the  bank  as  collateral  security 
for  the  payment  of  the  note  of  $4000,  on  which  the  defendant  was  a 
surety. 

On  November  12,  1831,  Stephen,  Nathan,  and  Parmenas  again  mort- 
gaged the  same  real  estate  to  William  Whitney,  to  secure  the  payment  of 
all  such  advances  and  claims  as  he  might  have  against  Parkhurst  <t  Co. 

In  January,  1833,  the  right  in  equity  of  Stephen,  Nathan,  and  Parmenas 
to  redeem  the  same  real  estate  was  taken  on  an  execution  in  favor  of  a 
creditor,  and  the  plaintiff  and  Lee  Claflin  and  the  defendant  agreed  to 
become  the  joint  purchasers,  provided  they  could  obtain  it  for  a  certain 
price ;  and  on  February  25,  1833,  it  was  sold  to  them  for  $2000,  and  on 
the  same  day  a  deed  thereof  was  duly  made  to  them  by  the  officer.  Among 
the  incumbrances  on  the  estate,  subject  to  which  the  equity  of  redemption 
was  sold,  the  Farnum  mortgage  was  mentioned  by  the  officer,  at  the  sale 
and  in  his  deed.  He  also  mentioned  the  Whitney  mortgage,  and  stated 
that  the  amount  due  thereon  was  less  than  $2000.  It  was  a  part  of  the 
agreement  between  the  plaintiff  and  defendant  and  Lee  Claflin,  that  the 
Farnum  mortgage  should  be  relieved  from  the  claim  of  the  Mendon  Bank, 
by  the  payment  of  the  note  for  $4000,  and  that  the  assignment  to  the 
bank,  which  had  not  been  recorded,  should  be  cancelled,  and  that  the 
defendant  should  convey  one-third  of  the  mortgage  to  the  plaintiff  and 
one-third  to  Lee  Claflin. 

Stephen  R.  Parkhurst,  by  conveyances  from  Nathan  and  Parmenas,  had 
become  the  sole  owner  of  the  right  to  redeem  from  the  sale  on  execution, 
and  on  March  6,  1833,  in  consideration  of  $300  paid  him  by  the  plaintiff, 
the  defendant,  and  Lee  Claflin,  he  quitclaimed  to  them  all  his  right,  title, 


SECT.  I.]  CLAFLIN    V.    GODFREY.  133 

and  interest  in  the  estate,  they  agreeing  to  take  up  the  note  for  $4000  to 
the  Mendou  Bank. 

On  June  17,  1833,  the  plaintiff  and  Lee  Claflin  each  paid  to  the  defendant 
one-third  part  ot  the  amount  due  on  the  note  for  $4000,  by  giving  with 
the  defendant  their  joint  and  several  note  therefor  to  the  bank,  which  note 
has  since  been  paid  by  them  in  equal  portions ;  and  the  plaintiff  and  Lee 
Ch^flin  also  paid  each  one-third  part  of  the  sum  of  $756,  with  interest 
thereon,  by  cash  paid  to  the  defendant ;  the  third  part  of  both  sums 
amounting  to  $1722.77.  The  bank  thereupon  gave  up  the  note  for  $4000, 
and  the  note  for  $4500,  and  cancelled  the  deed  of  assignment  made  by  the 
defendant  to  the  bank,  of  the  Farnum  mortgage,  intending  thereby  to 
revest  in  the  defendant  whatever  estate  he  had  at  the  time  of  making  the 
assignment,  so  as  to  enable  him  to  assign  to  the  plaintiff  and  Lee  Claflin, 
in  the  manner  before  mentioned. 

On  the  same  17th  of  June,  the  defendant,  in  consideration  of  the  sum  of 
$3454.54  so  paid  by  the  plaintiff  and  Lee  Claflin,  by  his  deed  of  that  date 
transferred  to  them  two-third  parts  of  the  Farnum  mortgage,  and  two-third 
parts  of  the  note  for  $4500  thereby  secured. 

Stephen,  Nathan,  and  Parmenas  Parkhurst  had  all  become  insolvent 
before  the  same  17th  of  June,  and  are  still  insolvent. 

The  plaintiff  proved,  that  after  the  conveyance  by  the  defendant  to  the 
plaintiff  and  Lee  Claflin,  Whitney,  in  a  bill  in  equity  between  him  and  the 
present  plaintiff  and  Lee  Claflin,  resisted  the  note  and  mortgage  for  $4500, 
on  account  of  the  payment  made  by  Parkhurst  &  Co.  to  Farnum,  and 
thereby  defeated  the  same.  The  claim  of  Whitney  under  his  mortgage 
turned  out  to  be  more  than  $10,000,  instead  of  being  less  than  $2000,  as 
stated  by  the  officer  at  the  sale  of  the  equity  of  redemption. 

After  Whitney  had  so  defeated  the  note  and  mortgage  for  $4500,  the 
plaintiff  brought  his  present  action  to  recover  the  sum  of  $1722.77  paid 
by  him  therefor  to  the  defendant. 

Judgment  was  to  be  entered  on  a  nonsuit  or  default,  according  to  the 
opinion  of  the  court  upon  the  foregoing  facts. 

Newton  and  Merrick,  for  the  plaiiitift". 

C.  Allen  and  Washburn,  for  the  defendant. 

The  opinion  of  the  court  (Shaw,  C.  J.,  and  Dewey,  J.,  dissenting),*  was 
delivered  by 

Morton,  J.  We  have  bestowed  unusual  labor  and  care  upon  this  <?ase, 
and  with  our  best  efforts  have  found  some  difficulty  in  understanding  the 
very  complicated  state  of  the  facts,  and  still  more  in  applying  to  them  the 
principles  of  law  by  which  the  rights  of  the  parties  should  bo  determined. 

>  Tlie  dissenting  opinion  of  yir.  Cliicf  Justice  SiiAW,  in  wliidi  Mr.  Justice  Dkwky 
concurred,  ha,s  been  omitted.  The  dis.sent  arose  more  from  a  dilTereiiec  of  ojiinion  :w 
to  the  facts  est.ihlislieil  by  the  evidence  than  from  a  difference  of  opiiiioa  as  to  the  rules 
of  law  applicable  to  such  facts.  —  Ed. 


134  CLAFLIN   V.    GODFREY.  [CHAP.  II. 

We  have  the  more  carefully  investigated  the  subject,  because  there  has 
been  from  the  beginning  a  difference  of  opinion  among  the  members  of 
the  court.  And  I  regret  to  add,  that  with  our  most  earnest  endeavors 
we  have  not  been  able  to  unite  in  the  result  which  I  am  now  about  to 
announce. 

The  action  is  assumpsit  for  money  had  and  received  by  the  defendant  to 
the  plaintiff's  use,  and  for  money  paid  by  the  plaintiff  for  the  defendant's 
benefit.  This  is  often  called  an  equitable  action,  and  is  less  restricted  and 
fettered  by  technical  rules  and  formalities  than  any  other  form  of  action. 
It  aims  at  the  abstract  justice  of  the  case,  and  looks  solely  to  the  inquiry, 
whether  the  defendant  holds  money,  which  ex  a^quo  et  bono  belongs  to  the 
plaintiff.  It  was  encouraged  and,  to  a  great  extent,  brought  into  use  by 
that  great  and  just  judge,  Lord  Mansfield,  and  from  his  day  to  the  present 
has  been  constantly  resorted  to  in  all  cases  coming  within  its  broad  princi- 
ples. It  approaches  nearer  to  a  bill  in  equity  than  any  otiier  common-law 
action  ;  and  indeed  has  many  of  the  advantages,  without  the  artificial 
formalities  and  dilatory  proceedings,  of  a  chancery  suit.  Moses  v.  Macfer- 
lan  ;  ^  Straton  v.  Rastall ;  ^  Roland  v.  Hall ;  ^  Parry  v.  Roberts.* 

The  plaintifi's  claim  grows  out  of  a  transaction  in  which  all  the  parties 
concerned  were  involved  in  a  series  of  gross  mistakes  and  errors,  which 
brought  upon  them  great  pecuniary  suffering.  The  object  of  the  present 
suit  is  to  determine,  as  far  as  practicable,  upon  whom  the  losses  shall  fall, 
and  how  they  shall  be  apportioned.  The  mistakes  were  accidental,  and 
there  is  no  reason  to  suppose  that  any  misrepresentation  or  deception  was 
attempted  or  practised  by  either  party. 

We  have  therefore  to  determine  who  of  the  innocent  sufferers  shall  sus- 
tain a  particular  loss  growing  out  of  the  misfortunes  of  a  joint  speculation. 
It  will  be  impossible  to  discuss  this  question  without  adverting  to  and 
examining  the  claims  of  a  person  who  is  not  a  party  to  the  suit,  who  has 
not  been  heard,  and  who  therefore  cannot  be  bound  by  our  judgment.  Lee 
Claflin  has  upon  the  docket  an  action  founded  upon  the  same  transaction,  and 
which  probably  will  depend  upon  the  same  facts  and  principles  as  the  case 
at  bar.  We  cannot  therefore  proceed  in  the  investigation  without  canvassing 
the  claims,  liabilities  and  rights  of  all  the  persons  engaged  in  the  disastrous 
speculation. 

Early  in  the  year  1833,  the  right  in  equity  of  redeeming  certain  real 
estate  in  Milford  was  advertised  for  sale  on  execution.  John  Claflin,  the 
plaintiff,  Lee  Claflin,  and  William  Godfrey,  the  defendant,  agreed  to  become 
the  joint  purchasers,  provided  they  could  obtain  it  for  a  price  which  they 
had  agreed  upon.  Accordingly,  on  February  25,  1833,  they  bid  off  the 
equity  for  the  sum  of  $2000,  which  was  paid  equally  by  the  three,  and 
took  a  joint  deed  of  the  whole.     At  the  auction  the  officer  represented 

1  2  Burr.  1012.  2  2  T.  K.  370.  '  1  Hodg.  Ill ;  s.  c.  1  Scott,  539. 

*  3  A.  &  E.  118  ;  s.  c.  5  Nev.  &  M.  663  ;  1  Leigh's  N.  P.  44. 


SECT.  I.]  CLAFLIN   V.    GODFREY.  135 

that  the  incumbrances  to  which  the  estate  was  subject  consisted  of  two 
mortgages  to  D.  and  11.  Waldo,  one  originally  given  to  John  Farnum,  and 
one  to  W.  "Whitney,  upon  which  less  than  §2000  were  due.  But  it  was 
afterwards  discovered  that,  instead  of  $2000,  over  $10,000  were  due  upon 
the  Whitney  mortgage.  This  amount,  with  the  Waldo  mortgages,  greatly 
exceeded  the  value  of  the  estate,  so  that  it  became  inexpedient  to  redeem 
it,  and  the  purchasers  lost  the  whole  consideration  paid  for  the  equity  of 
redemption.  There  can  be  no  doubt  that,  by  the  principles  of  law  and 
equity,  this  loss  must  fall  equally  upon  the  parties.  But  this  was  only  the 
beginning  of  the  errors  and  losses  into  which  this  unfortunate  transaction 
led  them. 

In  1828,  Stephen  R.  Parkhurst  &  Co.,  who  were  the  owners  of  the  real 
estate  aforesaid,  mortgaged  it  to  John  Farnum  to  secure  the  paynieut  of 
$4500.  Farnum  assigued  the  mortgage  to  John  Claflin,  the  plaintiti',  to 
secure  him  for  his  liability  to  Farnum  as  the  surety  of  Parkhurst  &  Co. 
Afterwards  John  Claflin,  having  been  relieved  from  his  suretyship,  at  the 
joint  request  of  Godfrey  and  Parkhurst  &  Co.,  and  without  receiving  any 
consideration  from  either,  assigned  the  mortgage  to  Godfrey.  This  assign- 
ment was  procured  by  Parkhurst  &  Co.  to  secure  Godfrey  for  his  liability 
for  them  to  the  Mendon  Bank,  on  a  note  of  $4000.  Godfrey  again  assigned 
the  mortgage  to  the  bank  as  collateral  security  for  the  above  note,  which 
he  had  signed  as  surety. 

In  this  state  was  this  mortgage,  when  the  Claflins  and  Godfrey  agreed 
to  purchase  the  equity  of  redemption.  It  was  a  part  of  their  agreement, 
that  this  mortgage  should  be  relieved  from  the  claim  of  the  Mendon  Bank 
by  the  payment  of  the  note  for  which  it  was  holdeu  as  collateral  security ; 
and  that  the  assignment  to  the  bank,  which  never  had  been  recorded, 
should  be  cancelled  ;  and  that  Godfrey,  who  would  thus  be  restored  to  his. 
rights  as  holder  of  the  mortgage,  should  convey  to  each  of  the  Claflins  one- 
third  of  it,  so  that  the  three  should  become  equally  interested  in  it. 

In  pursuance  of  this  agreement,  "on  the  17th  of  June,  1833,  the  Claflins 
each  paid  to  Godfrey  one-third  of  the  amount  due  "  to  the  bank,  and  the 
whole  being  paid  the  note  was  taken  up  and  delivered  to  Godfrey,  and  the 
assigtiment  to  the  bank  cancelled.  The  mortgage  having,  as  the  parties 
supposed,  revested  in  Godfrey,  he  made  an  assignment  of  two-thirds  of  it 
to  the  Claflins,  thereby  vesting  in  each  of  the  three  an  equal  interest  in 
the  mortgage. 

The  payment  to  the  bank  was  made,  in  the  first  instance,  by  three  equal 
notes,  for  the  amount,  given  jointly  and  severally  by  the  three  parties. 
When  these  notes  became  due,  each  party  paid  one  of  them.  So  that  the 
payment  is  not  to  be  deemed  a  joint  act  of  the  throe,  but  a  several  payment 
by  each  of  one-third  of  the  amoimt.  And  the  three  notes  should  bo  con- 
sidered as  the  several  notes  of  the  parties,  two,  in  each  case,  being  sureties 
for  the  other. 


136  CLAFLIN  V.   GODFREY.  [CHAP.  II. 

Soon  after  this  transaction,  it  was  ascertained,  and  decided  by  this  court, 
in  a  bill  in  equity  between  Whitney  and  their  assignees,  that  the  payment 
to  Farnum  of  the  debt  which  the  mortgage  was  originally  made  to  secure, 
operated  in  law  as  a  discharge  of  the  mortgage,  which  thereby  became 
functus  officio.  So  that  all  the  subsequent  formal  transfers  were  inoperative, 
and  passed  nothing. 

The  conveyance  by  Godfrey  to  the  Claflins  having  entirely  failed,  it  would 
seem  that  they  ought  to  recover  back  the  consideration  which  they  paid. 
They  parted  with  their  money,  for  what  all  parties,  at  the  time,  supposed 
to  exist  and  have  value.  But  it  proved  to  be  valueless ;  to  be,  in  fact,  a 
nonentity.  Godfrey  parted  wilh  nothing  of  any  value.  He  received  the 
money  of  the  Claflins,  and  the  plainest  principles  of  justice  require  that 
he  should  restore  that  which  he  received  without  having  given  anything  in 
return.  Fowler  v.  Sheaver  ;  ^  Bond  v.  Hays  ;  *  Lazell  v.  Miller ; '  The 
Union  Bank  v.  Bank  of  United  States ;  *  Haven  v.  Foster.^ 

The  general  principle,  that  when  the  whole  consideration  fails,  when  the 
title  is  entirely  nugatory  so  that  nothing  passes  by  the  conveyance,  the 
purchase-money  may  be  recovered  back,  is  unquestioned.  And  if  no  other 
ingredients  entered  into  this  arrangement  between  the  parties,  the  plaintiff's 
right  to  a  repetition  of  his  money  would  be  too  plain  to  admit  of  doubt. 

The  report  finds,  in  express  words,  that  the  Claflins  paid  Godfrey  two- 
thirds  of  the  amount  due  to  the  bank.  The  manner  in  which  it  was  done 
is  then  explained,  and  it  is  argued  that  it  does  not  show  a  payment  to 
Godfrey,  but  to  the  bank.  It  seems  to  us,  that  inasmuch  as  Godfrey  was 
the  person  liable  to  the  bank,  —  as  he  was  to  receive  back  the  mortgage,  — 
and  he,  and  not  the  bank,  was  to  assign  it  to  the  Claflins,  the  transaction 
should  be  viewed  in  the  light  of  a  payment  to  Godfrey  and  by  him  to  the 
bank.  But  we  do  not  attach  great  importance  to  this  view  of  the  subject. 
For  we  think  that  the  plaintiff"'s  claim  is  equally  good,  whether  we  consider 
the  payment  to  have  been  made  to  Godfrey  or,  by  his  request,  to  the  bank, 
in  satisfaction  of  his  note  due  there.  It,  in  both  cases,  would  operate 
equally  for  his  benefit. 

But  it  is  further  contended  with  plausibility,  if  not  force,  that  it  was 
part  of  the  original  agreement  between  the  parties,  that  they  should  not 
only  purchase  the  equity  of  redemption,  but  also  should  buy  in  this  out- 
standing mortgage,  and  therefore  that  the  three  parties,  being  equally 
innocent  and  having  equal  means  of  knowledge,  must  bear  the  loss  equally. 
Had  all  the  facts  been  as  stated,  and  had  the  mortgage  been  in  the  hands 
of  a  third  person,  instead  of  one  of  the  purchasers,  the  loss,  if  any  were 
sustained,  should,  like  the  loss  on  the  purchase  of  the  equity,  fall  equally 
upon  all.  But  it  may  be  said  in  reply,  and  we  think  it  unanswerable,  that 
had  the  mortgage  been  in  other  hands  upon  the  failure  of  the  assignment, 

1  7  Mass.  31.  2  12  Mass.  34.  ^  15  Mass.  207.  *  3  Mass.  74. 

6  9  Pick.  112. 


SECT.  I.]  CLAFLIN   V.   GODFREY.  137 

the  money  might  have  been  recovered  back.  Why  should  the  Claflins  be 
j'laced  in  a  worse  condition  than  if  they  had  purchased  tlie  mortgage  of  a 
third  person  %  Can  the  defendant  have  any  greater  rights  against  the 
plaintiff,  than  a  stranger  would  havel     We  tliink  not. 

Nor  can  we  perceive  that  the  relation  which  the  defendant  bears  to  the 
bank  debt,  affects  the  respective  rights  of  the  parties.  It  is  true  Godfrey 
had  signed  the  note  only  as  surety.  It  was  for  the  debt  of  Parkhurst  ik  Co. ; 
but  he  was  bound  to  pay  the  debt.  And  it  can  make  no  difference  to  the 
Claflins,  whether  he  had  incurred  this  liabiUty  on  his  own  account  or  for 
another. 

But  it  is  further  contended,  that  the  Claflins  and  Godfrey  contracted 
with  Stephen  K.  Parkhurst  to  purchase  in  his  right  to  redeem  from  the 
Rale  of  the  equity  as  well  as  from  the  mortgages,  and  that  a  part  of  the 
consideration  of  this  purchase  was  the  agreement  to  pay  the  above  note 
to  the  Mendon  Bank ;  that  the  conveyance  having  been  made  upon  this 
consideration,  Godfrey  was  deprived  of  his  remedy  over  against  his  princi- 
pals, and  also  against  his  co-surety  for  contribution.  This  objection  cer- 
tainly has  great  weight  and  constitutes  the  principal  difficulty  in  the  case. 
But  we  think  it  is  not  insuperable. 

The  facts  in  relation  to  this  point  appear  to  be  the  following.  The  Claf- 
lins and  Godfrey,  after  the  purchase  of  the  equity  of  redemption  at  the 
sheriff's  sale,  in  pursuance  of  their  original  plan  to  become  the  owners  of 
the  Milford  estate,  and  to  perfect  tlieir  title  to  it  agreed  to  purchase  of 
Parkhurst  all  his  right  to  redeem  the  estate,  and  accordingly  completed  a 
contract  witli  him  to  that  effect.  To  induce  Parkhurst  to  convey  the  right 
of  redemption,  which  remained  to  him,  the  Claflins  and  Godfrey  agreed  to 
pay  him  $300  and  to  take  up  the  note  at  the  Mendon  Bank.  In  execution 
of  this  agreement  Parkhurst,  on  the  Gth  of  March,  1833,  made  a  deed  of 
quitclaim  to  the  Claflins  and  Godfrey,  who  at  the  same  time  paid  him  the 
$300,  and  afterwards,  in  the  manner  above  stated,  took  up  the  Mendou 
Bank  note. 

We  do  not  doubt  that  the  real  consideration  of  the  release  of  the  equity 
was  the  payment  of  the  note  as  well  as  the  cash.  As  to  the  money  paid, 
there  can  be  no  ground  for  contribution.  It  was  a  payment  upon  a  joint 
speculation,  and  if  it  turned  out  to  be  a  bad  one,  the  loss  must  be  borne 
equally  by  the  parties.  If  they  have  any  remedy,  it  must  be  against 
Parkhurst,  to  recover  back  money  paid  to  him  under  a  mistake;  but  neitlior 
can  have  a  ri^ht  to  throw  upon  his  associates  an  undue  proportion  of  the 
common  loss. 

Does  the  payment  to  the  Mendon  Bank  stand  on  the  same  footing]  If 
tlie  parties,  without  nii8ai)[)rehension  and  with  a  knowledge  of  all  the  facts, 
had  made  this  contract,  altliough  in  its  operation  it  had  relieved  (Jodfroy 
at  the  expense  of  tlie  Claflins,  it  would  unquestional)ly  have  been  valid  and 
have  laid  no  foundation  for  n  repetition  of  the  money  paiil,  nor  for  a  con- 


138  CLAFLIN  V.    GODFREY.  [CHAP.  II. 

tribution  between  tlie  sufferers.  It  would  have  stood  upon  the  same  ground 
as  the  contract  with  Parkhurst,  and  the  purchase  at  the  sheriff's  sale.  If 
ihis  agreement  with  Parkhurst  to  pay  the  bank  debt  was  an  obligatory  one, 
it  would  discharge  the  Parkhursts  from  their  liability  over  to  Godfrey. 
And  if  Godfrey  was  deprived  of  his  right  to  recover  of  his  principals  and 
co-surety,  it  would  be  very  unjust  to  throw  upon  him  the  loss  incurred  by 
the  joint  acts  of  the  three,  and  to  relieve  the  other  two  of  their  share  of 
the  common  responsibility. 

Nor  is  the  circumstance  that  the  Parkhursts  were  and  are  entirely  insol- 
vent, any  answer  to  this  view  of  the  subject.  It  cannot  be  known  that 
they  will  not  become  able  to  reimburse  Godfrey.  But  further,  the  legal 
rights  and  liabilities  of  parties  do  not  depend  upon  their  pecuniary  ability 
to  perform  their  contracts.  And  if  this  arrangement  operated  so  as  to 
deprive  Godfrey  of  his  remedy  against  his  principals  and  co-surety,  then 
we  can  see  no  good  reason  why  the  whole  amount  paid  to  the  bank  should 
be  thrown  upon  him,  rather  than  divided  between  the  parties. 

But  a  majority  of  the  court  is  of  opinion  that  such  was  not  the  legal 
effect  of  this  transaction.  All  the  parties  acted  under  a  total  misapprehen- 
sion of  all  the  material  facts  in  the  case,  as  well  as  of  tlieir  own  legal  rights 
and  liabilities.  No  fraud  enters  into  our  consideration;  everything  was 
perfectly  fair ;  but  all  the  persons  concerned  in  the  several  contracts  were 
equally  misinformed  and  acted  under  the  same  errors  in  relation  to  the 
principal  subjects  of  the  negotiations. 

In  making  the  contract  to  purchase  the  last  right  of  redemption,  the 
Claflins  and  Godfrey  on  the  one  side,  and  the  Parkhursts  on  the  other,  fully 
believed  and  acted  on  the  conviction  that  Whitney's  incumbrance  was  less 
than  $2000,  whereas  it  exceeded  $  10,000;  and  what  is  more  important, 
that  the  Farnum  mortgage  was  a  valid  lien  upon  the  estate,  taking  prece- 
dence of  Whitney's  mortgage,  and  being  certainly  worth  its  face,  whereas, 
in  fact,  it  had  no  legal  existence  and  had  no  value.  Now  had  these  facts 
been  known  to  the  parties  at  the  time,  they  never  would  have  made  the 
contracts  they  did.  It  is  impossible  to  suppose  that  the  Claflins  would 
have  agreed  to  pay  several  thousand  dollars  for  what  tliey  knew  had  no 
validity  or  value  and  could  in  no  event  be  of  any  avail  to  them. 

The  whole  basis  of  the  contracts  having  ftiiled,  the  contracts  themselves 
must  fall,  and  the  parties,  as  far  as  practicable,  be  placed  in  statu  quo. 
They  should  be  remitted,  as  far  as  the  existing  state  of  things  will  permit, 
to  all  their  former  rights.  The  purchasers  of  the  last  right  of  redemption 
may  recover  back  the  money  paid  for  it.  Godfrey  may  have  the  same 
remedy  against  his  principals  and  co-surety  which  he  might  have  had  if  he 
had  made  no  agreement  for  the  purchase  of  the  equity.  And  the  Claflins 
should  be  placed  in  the  same  situation  they  would  have  been  in  had  they 
never  become  parties  to  the  agreement.  Had  Godfrey  alone  purchased  the 
equity  of  the  sheriff,  made  the  contract  with  the  Parkhursts,  and  paid  the 


SECT.  I.]  CLAFLIN   V.   GODFREY.  139 

Meudoii  Bank  note,  as  the  three  have  done,  we  think  it  extremely  clear 
that  the  mutual  misapprehensions  would  have  avoided  the  contract,  and 
that  he  would  have  been  restored  to  all  his  rights  against  the  Parkhursts 
and  other  parties  to  the  transaction. 

Had  the  Farnum  mortgage  been  holJen  by  a  stranger  instead  of  Godfrey 
and  the  contract  been  with  him  for  the  assignment  of  it,  the  consideration 
undoubtedly  might  have  been  recovered  back.  It  would  have  been  like 
the  purchase  of  a  forged  mortgage  or  counterfeit  bank  bills.  There  wo\ild 
have  been  an  entire  failure  of  the  contract.  Or  had  the  Claflins  made  a 
contract  with  the  bank  for  the  purchase  of  two-thirds  of  the  mortgage  and 
had  the  bank  assigned  to  them,  we  cannot  doubt  that  they  might  have 
recovered  back  the  consideration  which  they  paid  for  it.  And  we  can  per- 
ceive no  reason  why  the  principle  should  not  apply  to  the  case  at  bar,  unless 
the  arrangement  under  consideration  operated  as  a  discharge  of  the  Park- 
hursts from  their  liability  over  to  Gcjdfrey.  This  we  have  endeavored  to 
sliow  was  not  the  case.  If  Godfrey  intended  to  discharge  the  Parkhursts, 
or  if  he  supposed  that  such  would  be  the  legal  effect  of  tliese  acts,  it  was 
because  he  believed  that  he  received  something  of  value  from  them.  But 
inasmuch  as  he  received  nothing,  no  discharge  can  be  implied,  nor  is  there 
any  consideration  which  would  support  an  express  one. 

It  was  undoubtedly  the  clear  understanding  of  all  the  parties,  that  the 
plaintiff  should  receive  and  become  the  legal  owner  of  one-third  of  the 
Farnum  mortgage.  This  was  the  consideration  for  which  he  paid  his 
money.  But  contrary  to  the  honest  belief  of  all,  this  proved  to  be  a  legal 
nullity.  The  plaintiff  acquired  nothing.  He  paid  his  money  and  for  it 
received  nothing  in  return.  Upon  the  plainest  principles  of  right,  therefore, 
the  consideration  should  be  restored  to  him.  Nor  would  this  operate  un- 
justly upon  the  defendant.  He  supposed  that  he  had  something  of  value, 
and  undertook  to  transfer  it  to  the  plaintiff.  But  it  turned  out  that  it  had 
no  legal  existence,  and  that  he  had  transferred  nothing.  Having,  by  mis- 
apprehension, got  something  without  parting  with  anything,  why  should 
he  not  restore?  He  not  only  conveyed  nothing,  but  he  lost  nothing.  If 
he  restores  what  he  received,  he  will  be  in  as  good  a  situation  as  if  he  never 
had  received  it.  He  has  paid,  with  the  aid  of  the  Claflins,  a  debt  which 
he  would  have  been  obliged  to  pay  himself,  had  they  not  interfered.  He 
has  now  the  same  means  of  indemnity  against  others  which  he  would  have 
had  in  that  case.  Let  the  Chiflius  recover  back  the  money  which  they 
paid,  and  it  will  be  the  nearest  practicable  approximation  to  a  restoration 
of  the  parties  to  their  original  rights. 

It  cannot  properly  be  objected  to  this  view  of  the  case,  that  the  parties 
contracted  with  a  full  knowledge  of  all  the  facts,  and  that  the  mistakes 
arose  altogether  from  a  misapprehension  of  the  law.  We  shall  not  hero 
enter  into  a  discussion  of  the  vexed  question,  whether  money  paid  by  mis- 
take of  law  can  be  recovered  back,  because  we  do  not  think  tiiat  tiie  doctrine, 


140  CLAFLIN   V.   GODFREY.  [CHAP.  IL 

if  sound,  applies.  See  Haven  v.  Foster.*  Here  was  a  total  misapprehension 
of  everything  material  to  the  subject  of  negotiation.  The  plaintiff  strives 
to  reclaim  the  consideration  of  a  contract  which  never  had  any  legal  force 
or  effect.  The  general  principle  is  well  settled,  that  when  the  consideration 
totally  fails,  where  nothing  passes  by  the  attempted  transfer  or  conveyance, 
the  amount  paid  may  be  recovered  back.  And  the  application  of  the 
principle  does  not  at  all  depend  upon  the  question,  whether  the  failure 
arose  from  ignorance  of  law  or  of  fact. 

In  relation  to  the  payment  to  Godfrey  of  one-third  of  the  amount  due 
from  the  Parkhursts  to  him,  all  the  court  are  of  opinion  that  the  plaintiff 
is  entitled  to  recover.  This  was  not  included  in  the  agreement  with  the 
Parkhursts.  It  was  a  part  of  the  consideration  paid  by  the  plaintiff  for  his 
part  of  the  Famum  mortgage.  And  as  he  received  nothing  for  the  money 
paid,  and  as  the  transaction  can  have  no  unfavorable  effect  upon  Godfrey's 
claim  upon  his  debtors,  we  think  that  he  must  recover  this  sum.  And 
notwithstanding  the  many  circumstances  which  tend  to  distinguish  the  two 
grounds  of  claim,  a  majority  of  us  are  of  opinion,  that  when  thoroughly  sifted 
and  placed  upon  their  true  merits,  they  both  rest  upon  the  same  equitable 
basis,  and  are  alike  compatible  with  sound  principles  of  law. 

There  is  also  another  short  and  general  view  of  the  subject,  which  we  think 
fairly  and  clearly  exhibits  the  substantial  justice  of  the  plaintiff's  claim. 

The  two  Claflins  and  Godfrey  engaged  in  a  joint  enterprise,  in  which  they 
•were  equally  interested.  Had  it  proved  fortunate,  they  would  have  shared 
equally  in  its  advantages.  It  proved  disastrous.  Common  justice  therefore 
required  that  they  should  bear  equally  the  common  misfortune.  But  unless 
the  plaintiff  may  recover  in  this  action,  the  Claflins  would  not  only  sustain 
the  whole  loss,  but  Godfrey  would  actually  be  enriched,  by  a  speculation 
which  caused  a  great  loss  to  the  conmion  concern.  Godfrey  had  a  debt  due 
to  himself,  and  also  owed  a  debt  as  surety  to  the  Mendon  Bank,  two-thirds 
of  both  of  which  the  Claflins  have  paid.  As  the  Parkhursts  were  insolvent, 
the  former  would  have  remained  unpaid  and  the  latter  must  have  been 
paid  by  Godfrey.  Now  unless  he  be  holden  to  repay  to  the  Claflins  the 
amount  paid  by  them  to  him,  he  will  make  a  clear  profit  of  the  money  thus 
received,  deducting  only  the  amount  which  he  paid  for  the  two  equities ; 
while  the  two  Claflins  will  not  only  lose  the  sums  paid  for  the  equities,  but 
also  the  amount  paid  to  Godfrey.  This  cannot  be  equal  justice.  But  if 
Godfrey  repay  to  the  Claflins  the  amount  received  of  them,  then  he  will  be 
in  the  same  situation  he  would  have  been  in  had  the  Claflins  paid  him 
nothing.  He  will  have  his  claim  against  the  Parkhursts  for  their  debt  due 
to  him,  and  for  the  money  he  has  been  obliged  to  pay  for  them  by  reason 
of  having  become  their  surety. 

The  defendant  is  to  be  defaulted  and  judgment  is  to  be  entered  for  the 
plaintiff  for  both  sums,  with  interest  from  the  time  of  payment. 

Defendant  defaulted. 
*  9  Pick.  112. 


SECT.  I.]     EAY  AND  THORNTON  V.   BANK  OF  KENTUCKY.        141 


RAY  AND  THORNTON  v.   THE  BANK   OF   KENTUCKY. 

In  the  Court  of  Appeals  of  Kentucky,  May  31,   1843. 

[Reported  in  3  B.  Monroe,  510.] 

This  is  an  action  of  assumpsit,  brought  by  Ray  and  Thornton,  to  recover 
back  money  paid  to  the  Bank  of  Kentucky,  at  their  branch  at  Greensburg, 
on  a  bill  of  exchange.  Ray  and  Thornton,  citizens  of  Lebanon,  Ky.,  and 
traders  to  the  South,  had  procured  from  Saunders,  a  wealthy  gentleman  of 
Woodville,  Mississippi,  as  drawer,  a  bill  of  exchange,  drawn  in  their  favor 
and  accepted  by  Throckmorton  of  New  Orleans,  for  $1193.58,  dated  the 
18th  of  February,  1810,  payable  on  the  1st  of  November  next  thereafter; 
and  having  procured  the  names  of  their  friends  at  Lebanon,  David  Philips, 
S.  Spaulding  &  Co.,  and  Floyd  and  Ray  as  accommodation  indorsers  on  the 
bill,  in  July,  sold,  indorsed,  and  delivered  the  same  to  the  Bank  of  Ken- 
tucky, at  their  branch  at  Greensburg.  The  bill  was  started,  by  mail,  to 
New  Orleans,  by  the  cashier  of  the  branch  bank,  on  the  24th  day  of  Octo- 
ber, and  did  not  arrive  till  the  12th  of  November,  on  which  day  it  was  pro- 
tested for  non-payment,  and  notices  immediately  inclosed,  by  the  mail,  to 
the  cashier,  and  by  him  inclosed  to  the  indorsers  at  Lebanon.  It  appears 
that  Ray  and  Thornton  were  absent  in  the  South  when  the  notices  arrived ; 
that  the  plaintiff's  indorsers  being  uneasy  and  apprehending  difficulty  as  to 
the  effect  that  the  protest  might  have  upon  their  credit,  and  one  of  them 
having  an  accommodation  in  the  branch  bank  of  three  thousand  dollars, 
Finley,  Ray's  partner  in  a  mercantile  firm,  went  immediately  down  to 
Greensburg,  at  the  request  of  the  indorsers,  as  well  to  see  about  the  bill  as 
to  renew  a  note  of  $1000  which  he  and  Ray  had  in  bank,  and  which  they 
liad  been  promised  the  privilege  of  renewing  when  it  was  discounted ;  that 
tlie  directors  hesitated  to  permit  a  renewal  on  account  of  Ray's  being  under 
protest  on  the  bill,  and  consented  to  permit  its  renewal  only  on  the  pay- 
ment of  $.500  down,  and  his  assurance  that  Ray  would  come  down  and  take 
up  the  bill  immediately  on  his  return  from  the  South.  Finley  did  not  see 
the  protest,  nor  did  he  doubt  that  Ray  and  Thornton  were  liable  for  the  bill. 
He  knew  nothing  about  bills  of  e.vchange,  and  it  was  proved  that  Ray, 
though  he  had  been  a  merchant  for  about  twenty  years,  know  very  little 
about  such  paper,  tlie  witness  stating  that  he  had  never  known  him  to  have 
anything  to  do  with  but  one  other  bill  of  exchange  before. 

Ray  returned  in  February,  1841,  and  went  immediately  down  to  Greens- 
burg and  paid  and  lifted  the  bill.  It  is  proven  by  the  cashier  tiiat  Ray, 
before  he  paid  the  bill,  knew  that  it  had  not  been  protested  till  the  12th  of 
November,  and  that  it  had  matured  on  the  1st  and  4th,  nnd  expressed 
regret  and  fears  that  he  migJit  sustain  loss  on  account  of  the  bill  not  having 


1 42  KAY   AND   THORNTON   V.   BANK   OF   KENTUCKY.      [CHAP.  II. 

reached  New  Orleans  in  time.  The  cashier  also  stated  that  he  did  not 
know  or  believe  that  the  indorsers  were  released,  nor  did  the  directors,  as 
he  believed.  It  was  also  proved  by  the  postmaster  at  Louisville,  that  ac- 
cording to  the  regulations  of  the  mail  at  the  time  the  bill  was  transmitted, 
letters  mailed  at  Greensbiirg  for  the  South  had  to  pass  through  Louisville, 
and  a  letter  mailed  on  the  24th  October  could  not  reach  New  Orleans  by 
the  4th  of  November.  It  is  further  proved  that  a  young  man  who  was  in 
the  employment  of  Messrs.  Henderson  &  Franklin,  of  New  Orleans,  had 
been  furnished  by  them  with  funds  to  pay  the  bill,  and  he  inquired  at 
every  bank  in  the  city  and  of  the  proper  officers  of  the  bank,  on  the  4th  of 
November,  when  said  bill  matured,  for  it,  and  would  have  paid  it,  but  it 
had  not  arrived  or  he  could  not  find  it.  He  instructed  the  officers  of 
the  bank  that  when  it  arrived  Henderson  &  Franklin  would  pay  it ;  but 
when  it  arrived,  on  the  12th,  it  was  not  paid,  the  funds  perhaps  having 
been  applied  to  other  objects.  It  appears  also  that  Throckmorton,  shortly 
after  the  maturity  of  the  bill,  failed  and  died  wholly  insolvent,  about  the 
time  the  bill  was  paid  to  the  bank. 

That  Ray  and  Thornton,  and  all  the  other  indorsers  were  legally  re- 
leased and  discharged  from  all  responsibility  upon  the  bill,  is  unquestion- 
able. And  so  also  was  Saunders,  the  drawer,  unless  it  appeared  that  he 
had  made  no  provision  for  the  payment  of  the  bill,  nor  had  any  funds  for 
its  payment  in  the  hands  of  the  acceptor ;  the  contrary  of  which  is  always 
presumed  in  the  absence  of  proof  establishing  a  want  of  funds.'' 

That  Ray  knew  that  he  and  they  were  discharged  when  he  paid  and  lifted 
the  bill,  does  not  appear ;  but  the  presumption  may  be  fairly  indulged  that 
he  did  not  know  or  believe  it.  It  is  certain  that  the  fact  of  his  discharge 
was  not  communicated  to  him  by  the  officers  of  the  bank  ;  and  as  they  did 
not  know  that  the  indorsers  were  discharged,  as  is  proven  by  their  cashier, 
whose  business  it  was  to  deal  in  such  paper,  the  presumption  may  be  in- 
dulged that  Ray,  who  knew  but  little  about  such  paper,  did  not  know  it. 
And  though  it  is  proven  that  he  knew  that  the  bill  had  not  reached  New 
Orleans  in  time,  it  does  not  appear  that  he  knew,  or  that  the  fact  was  com- 
municated to  him,  that  the  bill  had  not  been  mailed  for  that  place  until 
the  24th  of  October,  and  that,  mailed  at  that  time,  it  could  not  reach  New 
Orleans  until  after  its  maturity.  Nor  does  it  appear  that  he  knew,  when 
he  paid  the  bill,  that  had  it  arrived  in  time  the  funds  were  ready  to  pay 
it  off,  and  that  it  would  have  been  paid,  and  he  and  all  the  indorsers 
discharged  from  further  liability. 

Upon  the  facts  proven,  the  Circuit  Court,  at  the  instance  of  the  coun- 
sel for  the  bank,  instructed  the  jury,  that  upon  the  whole  evidence  the 
plaintiffs  could  not  recover,  and  the  jury  having  found  accordingly,  and  a 
judgment  rendered  on  their  verdict,  the  plaintiffs  have  appealed  to  this 
court. 

1  Chitty  on  Bills,  198. 


SECT.  I.]        EAY   AND   THORNTON   V.   BANK   OF   KENTUCKY.  143 

We  are  clearly  of  opinion  that  the  court  erred  in  the  instruction  given. 
The  instruction  is  in  the  nature  of  a  demurrer  to  the  evidence,  and  should 
not  have  been  given  unless  from  the  facts  proven,  and  every  reasonable 
inference  that  might  be  deduced  from  them,  favorable  to  the  plaintiffs, 
by  a  jury,  they  could  not  have  found  for  the  plaintitYs.  Giving  to  the  evi- 
dence this  favorable  interpretation,  we  think  that  it  may  be  assumed  as 
proven,  that  Ray,  when  he  made  the  payment,  was  ignorant  of  the  law  by 
wliich  he  was  discharged  ;  ignorant  of  tlie  laches  of  the  officers  of  the  bank, 
in  not  starting  the  bill  in  time ;  and  ignorant  of  the  fact  that  funds  were 
prepared,  and  had  the  bill  arrived  in  proper  time  it  would  have  been  paid 
off,  and  that  in  consequence  of  the  negligence  of  the  bank  only,  in  failing  to 
forward  the  bill  in  time,  it  was  not  paid,  and  the  responsibility  was  thrown 
upon  him,  and  his  recourse  upon  the  drawer  lost ;  that  in  ignorance  of  his 
legal  exoneration,  as  well  as  of  the  facts  stated,  he  paid  the  bill.  Upon 
these  facts  and  conclusions,  which  the  jury  might  have  fairly  deduced  from 
the  evidence  in  the  cause,  we  think  that  it  was  not  only  their  right  but 
their  duty  to  find  for  the  plaintiffs. 

It  has  long  been  a  controverted  question,  whether  a  party  could  avail 
himself  of  his  mistake  or  ignorance  of  the  law  merely,  as  a  ground  to  exon- 
erate himself  from  his  civil  obligation  or  to  rescind  an  executed  contract 
or  recover  back  money  paid.  Able  authorities,  in  England  and  in  the 
American  States,  may  be  found  upon  both  sides  of  the  question.  This 
court  took  occasion  to  examine  many  of  those  authorities,  in  the  case  of 
Underwood  v.  Erockman.^  And  in  this  case  we  have  not  only  reviewed  the 
authorities  there  referred  to,  but  have  examined  many  others  in  the  English 
courts,  as  well  as  in  the  courts  of  the  States  of  this  Union.  We  will  not 
stop  here  to  refer  to  those  authorities,  but  will  refer  to  two  able  numbers 
in  the  American  Jurist,  vol.  23,  pages  143,  371,  in  which  all  the  authorities 
upon  both  sides  of  this  question  are  collected  and  compared,  and  the  affir- 
mative of  the  question  maintained  with  distinguished  ability.  The  review 
which  we  have  made  has  confirmed  us  in  the  opinion  that  the  principle 
settled  in  the  case  of  Underwood  v.  Brockman  is  correct,  and  ought  to  be 
sustained.  We  admit  that  there  may  be  a  diffi^rence  between  executory 
and  executed  contracts  ;  between  the  promise  to  pay  and  the  payment  of 
money ;  or  rather,  that  it  would  require  a  more  palpable  case  of  mistake  of 
law  or  of  fact  to  rescind  an  executed  contract  or  to  recover  back  money 
paid,  than  to  resist  the  payment  or  enforcement  of  performance  of  an  exec- 
utory contract.  The  parties  change  sides  in  the  controversy,  and  ho  who 
would  be  defendant  in  an  executory  contract  becomes  plaintiff  or  complain- 
ant in  the  action  to  rescind  or  recover  back  money  paid,  and  the  maxim, 
"the  better  is  the  condition  of  the  defendant,"  changes  its  operation  on  the 
parties.  But  the  principle  is  the  same  in  both  classes  of  cases,  the  differ- 
ence is  in  the  degree  or  force  of  evidence  necessary  to  make  out  or  sustain 

the  case. 

1  i  Dana,  309. 


144  KAY   AND   THORNTON   V.    BANK   OF   KENTUCKY.         [CHAP.  IL 

Upon  the  whole  we  would  remark  that  whenever,  by  a  clear  and  palpa- 
ble mistake  of  law  or  foot  essentially  bearing  upon  and  affecting  the  con- 
tract, money  has  been  paid  without  cause  or  consideration,  which  in  law, 
honor,  or  conscience  was  not  due  and  payable,  and  which  in  honor  or  good 
conscience  ought  not  to  be  retained,  it  was  and  ought  to  be  recovered  back.^ 
If  this  principle  be  applied  to  the  facts  in  this  case  we  cannot  doubt  that 
the  plaintiffs  should  recover.     We  cannot  doubt,  indulging  in  a  reasonable 
deduction  from  the  testimony,   that  Ray  was  not  only   ignorant  of  his 
leo-al  discharge,  but  was  ignorant  and  unapprized  of  material  facts,  which 
had  he  known,  might  have  entirely  changed  his  determination  to  pay,  as 
they  did  in  fact  exonerate  him  from  all  the  obligations  of  morality  or  honor 
to  make  payment.     He  might,  as  an  honorable  and  fair  man,  have  felt  will- 
ing to  waive  any  technical  objection  to  the  non-arrival  of  the  bill,  had  the 
bank  done  its  duty  in  starting  it  in  time,  and  especially  when  he  was  unap- 
prized of  the  fact  that  had  it  arrived  in  time  it  would  have  been  paid,  yet 
not  feel  under  any  obligation  in  honor,  in  conscience,  or  morality,  to  pay 
the  bill,  had  he  known  that  its  non-payment  and  its  entire  loss  had  been 
produced  by  the  gross  negligence  of  the  bank,  and  not  by  any  casualty  on 
the  way.     Nor  can  it  be  presumed  that,  had  he  known  these  facts,  and  been 
also  apprized  of  his  and  his  indorsers'  legal  exoneration,  he  would  have 
made  payment.     To  indulge  in  such  a  presumption  would  be  to  presume 
that  he  would  without  cause  or  consideration  take  upon  his  firm,  volunta- 
rily, a  burthen  visited  upon  them  by  the  laches  of  the  bank,  which  legally 
rested  upon  the  institution,  and  should  in  good  conscience  and  morality 
be  borne  by  it.     Nor  can  the  bank  in  good  conscience,  morality,  or  honor, 
retain  the  money  ;  it  has  lost  the  amount  of  the  bill  by  the  negligence  of 
its  officers,  and  has  received  from  Eay  the  amount,  in  ignorance  of  his 
rights,  and  in  ignorance  of  facts  which  releases  him  from  all  moral  obliga- 
tion to  pay  it.     Should  they  not  refund  the  amount  and  bear  the  loss 
produced  entirely  by  their  own  negligence  1     Moreover,  he  had  a  right  to 
expect  that  the  bank,  whose  business  it  was  to  deal  in  such  paper,  had  done 
its  duty,  and  w^ould  not  set  up  claim  for  payment  from  the  indorsers  if  they 
were  not  liable.     Under  this  conviction  and  the  pressure  of  his  accommo- 
dation indorsers,  who,  no  doubt,  believed  also  that  they  were  all  liable,  he 
hastened  down  to  the  bank  immediately  upon  his  return  from  the  South,  and 
had  no  opportunity  to  inquire  fully  into  the  facts,  or  to  take  counsel  as  to 
his  legal  liability,  and  relying  upon  the  claim  of  the  bank  as  just,  and  as 
evidence  of  their  right  to  demand  payment,  might  not  have  conceived  it 
necessary  to  do  so,  being  thrown  off  his  guard  by  his  confidence  in  its  offi- 
cers and  their  unequivocal  assertion  of  right. 

But  it  is  said  that  he  and  his  friends  who  were  his  indorsers,  had  accom- 
modations in  bank,  and  might  look  for  others,  of  which  they  might  fear 
they  would  be  deprived  if  the  bill  was  not  paid,  and  this  may  have  furnished 
1  City  of  Louisville  v.  Heiming,  1  Bush,  accord.  —  Ed. 


SECT.  I.]  NORTHKOr'S   EXECUTORS   V.   GRAVES.  145 

a  motive  to  pay.  So  far  from  such  considerations  operating  in  favor  of  the 
bank's  conscientious  right  to  retain,  it  furnishes  an  additional  reason  on  the 
side  of  their  obligation  to  refund. 

If  Ray  acted  under  the  pressure  of  such  extraneous  influences,  he  did  not 
act  freely,  but  under  a  kind  of  moral  duress,  of  which  the  bank  taking  the 
advantage  had  exacted  from  him  money  which  was  his  own,  and  which  he 
had  a  right  to  retain,  and  should,  therefore,  be  deemed  under  a  stronger 
moral  obligation  to  refund. 

Upon  the  whole  we  are  perfectly  satisfied  that  the  instruction  was  erro- 
neous and  the  judgment  should  be  reversed.  It  is,  therefore,  the  opinion 
of  the  court  that  the  judgment  be  reversed  and  cause  remanded,  that  a  new 
trial  may  be  granted,  and  that  the  appellants  pay  the  costs  of  this  court. 

Pirtle  for  plaintiffs  ;  Guthrie  for  defendants. 


NORTHROFS   EXECUTORS  v.   GRAVES. 

In  the  Supreme  Court  op  Errors  of  Connecticut,  June,  1849. 

[Reported  in  19  Connecticut  Reports,  548.] 

This  was  an  action  of  indebitatus  assumpsit  for  money  had  and  received, 
tried  on  the  general  issue  at  Danbury,  October  term,  184:8. 

The  plaintiffs  are  the  executors  of  the  last  will  of  David  Northrop,  late 
of  Sherman,  deceased.  He  died  in  April,  1832;  and  his  will  was  duly 
proved  and  approved.  Sally  Graves  is  the  wife  of  the  defendant,  and  is 
still  living. 

The  plaintiffs,  in  support  of  their  claim,  offered  in  evidence  :  — 

1.  The  will  of  David  Northrop,  containing  the  clause  recited  in  18  Conn. 
R.  333. 

2.  The  depositions  of  Sylvanus  Mcrwin,  Flora  A.  Merwin,  and  Orrin 
Stevens.  The  former  testified  that  in  the  spring  of  1842,  he,  with  his  wife, 
went  to  the  dwelling-house  of  the  defendant  in  Sherman;  that  the  defendant 
Boon  afterwards  spoke  of  the  plaintiffs'  having  been  there  that  day  ;  said  that 
they  had  paid  500  dollars  on  the  will  of  their  father ;  that  he  had  given  no 
receipt  for  the  money  himself,  but  that  Mrs.  Graves  had  given  one ;  tliat 
by  the  will  it  was  to  go  to  the  sons,  and  the  plaintiffs  would  have  it  to  pay 
over  again  to  them ;  that  they  could  sue  the  plaintiffs  and  recover  it,  but 
the  plaintiffs  could  not  get  the  money  back  paid  to  Mrs.  Graves,  as  he  had 
not  receipted  it  himself;  that  the  deponent  was  acquainted  with  the  liaud- 
writing  of  Mrs.  Graves,  and  the  signature  to  said  receipt  was  genuine. 
Mrs.  F.  A.  Merwin  corroborated  the  testimony  of  her  husband. 

3.  The  testinif.ny  of  Jonathan  0.  Page,  stating  that  in  March,  1842,  ho 
held  in  his  liands  fur  collection  a  note  against  the  defendant,  ami  called  on 
him  fur  iiriyment  thereof,  who  at  first  declined  l)ayiiig  it,  on  tlie  ground  that 

10 


146  NORTHROP'S   EXECUTORS  V.   GRAVES.  [CHAP.  II. 

he  had  no  money  on  hand ;  but  in  a  day  or  two  afterwards,  the  defendant 
told  the  witness  he  would  pay  the  note,  saying  "  we  have  had  some  money 
very  unexpectedly  come  in ;  that  the  plaintiffs  had  been  there,  and  paid 
Mrs.  Graves  $500  for  her  legacy,  bequeathed  by  the  will  of  her  father  to 
her ;  but  it  was  not  according  to  the  will,  and  they  would  have  to  pay  it 
over  again,  as  the  money  was  not  coming  to  her  unless  the  defendant  died 
within  ten  years  from  the  death  of  the  testator,  but  was  to  go  to  her 
children." 

4.  The  testimony  of  Abraham  Briggs,  who  testified  that  in  the  summer  of 
1843,  he  was  on  a  visit  to  the  defendant's  house,  when  the  defendant  said 
to  him  that  the  plaintiifs  [naming  them]  had  paid  to  his  wife  $500  on  a 
legacy  given  to  her  in  her  father's  will ;  but  that  it  was  not  due  to  her,  but 
to  his  children,  and  he  was  going  to  sue  for  it. 

5.  The  receipt  of  Mrs.  Sally  Graves,  the  body  of  which  was  in  the  hand- 
writing of  one  of  the  plaintiffs,  and  was  as  follows :  "  Received,  Sherman, 
April  7th,  1842,  of  David  and  John  0.  Northrop,  executors  of  the  last  will 
of  David  Northrop,  late  of  Sherman,  deceased,  $500,  in  full  of  a  legacy 
bequeathed  by  said  deceased,  in  said  will,  to  his  daughter,  Sally  Graves, 
wife  of  Jedediah  Graves  ;  which  legacy  was  to  be  paid  to  said  Sally  Graves 
by  the  executors  of  said  will,  in  ten  years  after  his,  the  said  David  North- 
rop's  decease.     [Signed.]     Sally  Graves,  wife  of  Jedediah  Graves." 

6.  A  letter,  signed  by  the  defendant,  addressed  to  the  plaintiffs,  dated 
Dec.  8,  1843,  demanding  the  amount  of  said  legacy,  and  informing  the 
plaintiffs  that  he  should  be  in  Sherman  the  then  next  week,  and  in  case 
the  plaintiffs  should  not  pay  said  legacy  at  that  time,  he  must  and  should 
proceed  to  collect  the  same  as  the  law  directs. 

7.  The  testimony  of  Revilo  Fuller  and  David  D.  Hoag,  proving  a  demand 
made  by  the  plaintiffs,  in  August  or  September,  184G,  of  the  defendant,  for 
the  repayment  of  the  $500,  which  they  had  paid  to  his  wife  on  the  legacy 
given  to  her  by  the  will  of  her  father. 

To  the  whole  of  the  evidence  thus  offered  by  the  plaintiffs,  the  defendant 
objected,  on  the  ground  that  it  did  not  conduce  to  prove  that  the  money  in 
question  was  paid  by  the  plaintifls  to  Mrs.  Graves,  under  any  mistake  or 
misapprehension  of  any  facts ;  but  if  it  conduced  to  show  a  mistake  of  the 
plaintiffs  at  all,  it  was  a  mistake  of  the  law  only ;  and  also,  that  it  did  not 
conduce  to  prove  that  the  defendant  had  received  any  money  of  the  plain- 
tiffs.    The  court  overruled  the  objection  and  admitted  the  evidence. 

The  defendant  then  introduced  the  testimony  of  his  sons,  Edward  Graves 
and  George  Graves,  detailing  the  circumstances  under  which  the  money 
was  paid  to  Mrs.  Graves,  and  stating  that  it  was  mostly  laid  out  by  her  in 
furniture,  but  not  directly  contradicting  any  evidence  introduced  by  the 
plaintiffs. 

Upon  all  the  evidence  in  the  cause,  the  plaintiffs  claimed  that  they,  as 
executors  of  the  will  of  David  Northrop,  deceased,  and  from  his  estate,  had 


SECT.  I.]  NORTHROP'S   EXECUTORS   V.   GRAVES.  147 

paid  said  legacy  of  $500  to  Mrs.  Graves,  supposing  it  to  be  then  due  and 
payable  to  her  under  tlie  will,  and  under  a  misapprehension  of  the  terms 
and  directions  of  the  will;  and  they  prayed  the  court  to  charge  the  jury,  — 

1.  That  if  the  money  was  paid  by  the  plaintiffs,  as  executors,  to  apply  on 
the  legacy  of  Mrs.  Graves,  by  reason  of  their  forgetfulness  and  misapiireheu- 
sion  of  the  terms  of  the  will,  tliis  was  a  mistake  in  fact,  and  the  money 
thus  paid  might  be  recovered  back. 

2.  That  if  the  plaintiffs,  as  such  executors,  paid  the  legacy,  and  as  they 
supposed  to  carry  into  effect  the  directions  of  the  will,  though  the  payment 
was  made  by  reason  of  a  mistaken  construction  of  the  legal  import  of  the 
will ;  and  if  the  jury,  from  the  evidence  before  them,  believed  that  tlie 
defendant  had  no  moral  or  conscientious  right  to  retain  the  money,  the 
plaintiffs  were  entitled  to  recover. 

3.  That  if  the  legacy  was  so  paid  by  the  plaintiffs,  under  a  mistake  of 
their  legal  obligations  and  duty,  as  executors;  and  if  the  money  was  paid 
by  the  plaintiffs  and  received  by  the  wife  of  the  defendant,  with  his  knowl- 
edge and  consent,  he  knowing  of  the  mistake  of  the  plaintiffs  in  paying  tho 
money ;  and  if  he  remained  silent,  without  informing  the  plaintiffs  of  their 
mistake;  and  if  the  jury  believed  that  the  defendant  had  no  moral  or  con- 
scientious right  to  retain  the  money,  the  plaintiffs  had  a  right  to  recover. 

4.  That  if  the  plaintiffs  were  entitled  to  recover,  they  were  entitled  to 
recover  the  sum  of  §500,  together  with  interest  from  the  time  the  money 
was  paid. 

To  such  a  charge  the  defendant  objected,  and  claimed  that  if  the  plain- 
tiffs paid  the  legacy  to  Mrs.  Graves,  as  proved,  yet,  that  it  was  not  paid 
under  any  mistake,  or  misapprehension,  or  forgetfulness  of  facts  ;  but  if 
under  any  mistake  at  all,  a  mistake  of  the  law  alone,  and  if  so,  that  the 
plaintiffs  could  not  recover.  He  also  claimed  that  from  the  facts  proved, 
the  plaintiffs  had  not  sustained  their  declaration,  and  that  the  defendant, 
from  such  facts,  was  not  liable  in  this  action  :  he  therefore  prayed  tho 
court  to  charge  the  jury  in  conformity  with  his  views. 

The  court  charged  the  jury  as  claimed  by  the  plaintiffs;  and  thereupon 
the  jury  returned  a  verdict  in  their  favor  for  $695.  The  defendant  there- 
upon moved  for  a  new  trial,  for  a  misdirection. 

Button  and  //.  G.  Graves  for  the  defendant. 

Ilawleif  for  the  plaintiffs. 

Cnuucii,  C.  J.  In  deciding  this  case  we  have  not  supposed  it  necessary 
to  examine  very  critically  the  opinions  of  jurists,  which  have  been  advanced 
upon  the  general  question,  how  far  mistakes  of  law  may  l)e  relieved  again.st 
in  equity  ;  nor  what  is  the  precise  nature  of  tho  distinction  made  by  courts 
between  the  effect  of  mistakes  of  law  and  mistakes  of  fact  upon  the  rights 
and  responsibilities  of  parties.  The  questions  raised  on  this  motion  scorn 
to  us  to  be  within  limits  more  confined.  And  yet  wo  shall  have  occasion 
to  advert  to  some  of  the  cases  ou  tiiis  subject,  and  to  some  of  tlio  maxima 


148  NORTHROP'S   EXECUTORS   V.    GRAVES.  [CHAP.  II. 

which  are  supposed  to  apply  to  it ;  such  as  Volenti  non  fit  injuria,  Igno- 
rantia  legis  non  excusat ;  aud  to  the  maxim  often  in  requisition,  and  gener- 
ally false  in  reality,  that  eveiy  man  is  bound,  and  therefore  "  presumed  to 
know  the  law."  ^  These  and  all  other  general  doctrines  and  aphorisms,  when 
pi'operly  applied  to  facts  and  in  furtherance  of  justice,  should  be  carefully 
regarded ;  but  the  danger  is  that  they  are  often  pressed  into  the  service  of 
injustice,  by  a  misapplication  of  their  true  meaning.  It  is  better  to  yield 
to  the  force  of  truth  and  conscience  than  to  any  reverence  for  maxims. 

In  the  present  case  we  establish  no  new  principle,  nor  depart  from  any 
v.'ell-settled  doctrine  of  the  common  law.  We  do  not  decide  that  money  ^:)ai(/ 
hy  a  mere  mistake  in  jioint  of  law  can  he  recovered  hack ;  as  if  it  has  been 
paid  hy  an  infant,  by  a  feme  covert,  or  by  a  person  after  the  statute  of 
limitations  has  barred  an  action,  or  when  any  other  merely  legal  defence 
existed  against  a  claim  for  the  money  so  paid,  and  which  might  be  honestly 
retained.  But  we  mean  distinctly  to  assert  that  when  money  is  paid  by 
one  under  a  mistake  of  his  rights  and  his  duty,  and  which  he  was  under  no 
legal  or  moral  obligation  to  pay,  and  which  the  recipient  has  no  right  in 
good  conscience  to  retain,  it  may  be  recovered  back  in  an  action  of  indehi- 
tatus  assumpsit,  whether  such  mistake  be  one  of  fact  or  of  law  ;  and  this  we 
insist  may  be  done,  both  upon  the  principle  of  Christian  morals  and  the 
common  law.  And  such  only  was  the  doctrine  of  the  charge  to  the  jury 
in  the  present  case.  In  snch  a  case  as  we  have  stated,  there  can  be  no 
reasonable  presumption  that  a  gratuity  is  intended  ;  nor  is  the  maxim 
Volenti  non  fit  injuria  at  all  invaded.  The  mind  no  more  assents  to  the  pay- 
vient  made  under  a  mistake  of  the  law  than  if  made  under  a  mistake  of  the 
facts ;  the  delusion  is  the  same  in  both  cases ;  in  both  alike  the  mind  is 
influenced  by  false  motives. 

Xor  are  we  here  deciding  a  case  where  the  plaintiffs  claim  to  recover 
inider  a  mere  pretence  that  they  were  ignorant  of  the  law,  so  much  and  so 
strangely  feared  by  Judge  Story  ;'  but  a  case  in  which  the  jury  has  found 
that  such  mistake  existed  in  truth,  not  in  pretence. 

Nor  is  this  a  case  where  the  parties  have  made  a  compromise  of  a  claim, 
in  view  of  a  legal  doubt  or  nncertainty  as  to  an  asserted  right,  and  have 
taken  their  chances  of  the  result ;  but  a  case  in  which  the  plaintifls  verily 
supposed  they  were  bound  to  pay,  and  the  defendant,  at  the  same  time, 
knew  they  were  not ;  and  a  case  where  the  money  in  good  conscience  as 
much  belongs  to  the  plaintiffs  now  as  it  did  when  they  had  it  in  possession ; 
as  the  jury,  by  their  verdict,  have  found.  One  would  think  that  a  refer- 
ence to  adjudged  cases  could  not  be  necessary  to  establish  a  principle  of 

1  There  is  no  presumption  in  this  country  that  every  person  knows  the  law  ;  it  would 
be  contrary  to  common  sense  and  reason  if  it  were  so.  .  .  .  The  rule  is  that  ignoi-ance 
of  law  shall  not  excuse  a  man,  or  relieve  him  from  the  consequences  of  crime,  or  from 
liability  upon  a  contract.     Maule,  J.,  in  Martindale  v.  Faulkner,  2  C.  B.  706,  719. —  Ed. 

a  1  E<i.  123,  §  111. 


SECT.  I.]  NORTHROr'S   EXECUTORS   V.   GRAVES.  149 

natural  justice  so  obvious  as  that  a  right  of  repetitiou  must  exist  in  such  a 
case,  and  that  what  belongs  to  one  man  cannot  be  acquired  by  another, 
without  the  consent  or  the  fault  of  the  owner.  But  we  will  briefly  recur 
to  the  cases,  which,  as  we  think,  have  recognized  the  common  law  on  this 
subject,  and  see  if  the  princii^le  which  we  have  advanced  is  not  asserted 
or  recognized,  with  more  or  less  distinctness,  in  all  of  them. 

The  action  of  indebitatus  assumpsit  for  the  recovery  of  money  had  and  re- 
ceived, and  for  money  paid,  etc.,  is  an  action  of  the  conunon  law,  but  to  a 
great  extent  an  equitable  action,  adopted  for  the  enforcement  of  many 
equitable  as  well  as  legal  rights.  And  it  is  a  fundamental  principle  of 
this  action,  that  it  lies  for  the  recovery  of  money,  which,  ex  ccquo  et 
bom,  ought  to  be  paid  over  to  the  plaintiff;  and  that  the  law,  in  case  of 
such  equity,  will  imply  a  promise  to  pay  it.^  The  principles  of  the  action 
were  very  definitely  stated  by  Lord  Mansfield,  in  the  leading  case  of 
Closes  V.  Macferlan,^  and  have  never  since  been  doubted.  He  says,  "  If  the 
defendant  be  under  an  obligation,  from  the  ties  of  natural  justice,  to  refund, 
the  law  implies  a  debt,  and  gives  this  action  founded  in  the  equity  of  the 
plaintiff's  case,  as  if  it  were  upon  a  contract."  He  particularizes,  and  says 
again  :  "This  kind  of  equitable  action  to  recover  back  money  which  ought 
not  in  justice  to  be  kept,  is  very  beneficial,  and  therefore  much  encour- 
aged." He  goes  on  to  enumerate  several  cases  in  which  money  paid  can- 
not be  recovered  back,  as,  if  advanced  in  payment  of  a  debt  barred  by  the 
statute  of  limitations,  etc.,  and  as  a  reason:  "Because  in  all  these  cases 
the  defendant  may  retain  it  with  a  safe  conscience,  though  by  positive  law 
he  was  barred  from  recovering."  And  he  refers  to  money  paid  by  mistake, 
as  an  instance  of  the  equity  which  will  sustain  the  action  ;  making  no  allu- 
sion to  a  distinction  between  a  mistake  of  law  and  a  mistake  of  fact, — 
a  suggestion,  we  believe,  as  applied  to  this  action,  of  a  much  more  recent 
date. 

The  same  principle  was  recognized  and  applied  by  the  Court  of  Common 
Pleas,  in  the  case  of  Fai-mer  v.  Arundel.^  "  Whenever,"  says  Chief  Justice 
Dp:  Grey,  "money  is  paid  by  one  man  to  another,  on  a  mistake  cither  ot 
fact  or  of  law,  or  by  dcjj^it,  this  action  will  certainly  lie  ; "  and  because  the 
defendant  had  good  right  in  conscience,  in  that  case,  to  retain  the  money, 
the  plaintiff  failed  to  recover,  and  for  that  reason  alone,  although  the  money 
was  paid  under  a  mistake  of  the  law. 

The  case  of  Bize  v.  Dicka.son  *  deserves  special  attention,  because  the 
force  of  it  was  attempted  to  be  parried,  by  Lord  Ellenhouough,  in  Stevens 
V.  Lynch. ^  The  facts  sliow  the  case  to  be  one  of  a  mistake  of  law  only. 
The  plaintiff  was  a  broker  acting  under  a  del  credere  commission,  for  foreign 
corresjwndents,  and  the  l)aiikrupt  had  been  an  underwriter,  who  was  liable 
for  losses   which   the   correspondents   of  the   plaintiff  had   sustained,  and 

1  3  Bl.  Com.  163.  »  2  BniT.  1002.  »  2  Black.  W.  824. 

*  1  T.  R.  285.  ^  12  Kast,  137. 


150  NORTHROP'S  EXECUTORS  V.   GRAVES.       [CHAP.  II. 

which  he  had  paid  over  to  them,  without  having  received  the  amount  of 
the  losses  from  the  bankrupt.  The  plaintiff  being  indebted  on  other  ac- 
counts to  the  bankrupt,  in  a  still  larger  sum,  paid  the  whole  to  the  assign- 
ees of  the  bankrupt  under  a  mistake,  and  without  knowing  that  he  had  a 
leo-al  right  to  set  off  against  the  claims  of  the  bankrupt  the  amount  of  the 
losses  he  had  paid.  When  he  discovered,  from  the  decision  of  the  court, 
in  the  case  of  Grove  v.  Dubois,^  that  he  had  such  right,  he  brought  his 
action  against  the  assignees  of  the  bankrupt,  to  recover  back  the  amount 
of  the  money  which  he  had  paid  to  them,  which  by  law  he  had  a  right  to 
have  set  off.  jS^o  mistake  of  facts  existed,  and  none  was  adverted  to  by 
Lord  Mansfield,  discussing  the  plaintiff's  right  to  recover.  He  refers  only 
to  money  paid  under  mistakes  of  law,  and  applies  the  principle  he  had 
before  so  very  distinctly  stated,  in  the  case  of  Moses  v.  Macferlan,  and 
which  had  again  been  recognized,  in  explicit  terms,  by  Chief  Justice  De 
Grey  ;  and  without  reference  to  any  possible  distinction  between  mistakes 
of  law  and  of  fact,  he  concludes  :  "  But  where  money  is  paid  under  a  mis- 
take, which  there  was  no  ground  to  claim  in  conscience,  the  party  may 
recover  it  back  again,  by  this  kind  of  action."  And  it  may  be  remarked 
that  this  case  was  decided  after  the  case  of  Lowry  v.  Bourdieu,  ^  in  which 
BuLLER,  J.,  applied  the  maxim,  Ignorantia  legis  non  excitsat,  to  money 
paid  as  the  premium  on  an  illegal  gaming  policy. 

The  next  case  we  refer  to  is  Brisbane  v.  Dacres,  Executrix.*  This  case 
has  been  much  noticed,  and  efforts  made  to  press  it  into  the  service  of 
those  who  have  attempted  to  sustain  the  doctrines  of  this  defence  ;  but  with 
what  propriety,  will  be  seen  by  an  examination  of  it.  Mansfield,  C.  J., 
and  Chambre,  J.,  expressly  admit  the  principle  we  advance  ;  and  it  is 
neither  denied  nor  doubted,  as  we  can  see,  by  Gibcs  and  Heath,  JJ.  The 
plaintiff  was  the  commander  of  a  king's  ship  in  the  British  navy,  on  the 
Jamaica  station  ;  and  Lord  Dacres  was  the  admiral  there.  The  plaintiff, 
by  order  of  Lord  Dacres,  the  admiral,  took  on  board  his  vessel  a  large 
amount  of  specie  belonging  to  the  government,  and  transported  it  to  Eng- 
land, for  which  service  he  received  from  the  treasury  a  considerable  sum  as 
freight.  It  had  been  a  long  established  usage  in  the  navy  for  commanders 
of  vessels,  in  like  cases,  to  pay  over  one-third  of  the  freight  to  the  superior 
officer,  under  whose  orders  they  acted ;  although,  at  the  time  this  money 
was  paid  over  by  the  plaintiff,  he  was  not  bound  by  law  to  pay  it  over,  and 
the  admiral  had  no  legal  right  to  demand  it ;  but  it  was  paid  upon  the 
demand  of  the  admiral,  as  his  right.  The  action  was  brought  against  the 
executrix  of  Admiral  Dacres,  to  recover  back  the  money  so  paid.  Chambre, 
J.,  in  a  very  conclusive  argument,  maintained  the  right  of  the  plaintiff  to 
recover  the  money.  He  says  :  "  The  plaintiff  had  a  right  to  it,  and  the 
defendant  in  conscience  ought  not  to  retain  it.  The  rule  is,  that  when  he 
cannot  in  conscience  retain  it,  he  must  refund  it,  if  there  is  nothing  illegal 
1  1  T.  K.  112.  2  Doug.  463.  '  5  Taunt.  144. 


SECT.  I.]  NORTHROP'S   EXECUTORS   V.    GRAVES.  151 

in  the  transaction."  Mansfield,  C.  J.,  admits  the  rule  as  stated  by 
Cii.'S.MBRE,  J.,  saying,  "  If  it  was  against  his  conscience  to  retain  this  money, 
according  to  the  doctrine  of  Lord  Kenyok,  an  action  may  be  maintained  to 
recover  it  back."  But  because  the  money  was  paid  and  received  under  the 
former  usages  of  the  navy,  he  considered  it  entirely  proper  and  conscien- 
tious for  the  executrix  to  retain  it;  and  for  this  reason  alone,  he  opposed 
a  recovery.  Gibbs,  J.,  founded  his  opinion  in  the  defendant's  favor  upon 
the  fact  that  the  money  was  demanded  as  a  matter  of  right,  and  was  paid 
\ipon  such  a  demand  ;  and  this  being  submitted  to,  and  not  resisted  at  the 
time,  must  be  considered  as  a  voluntary  payment,  and  indeed,  as  a  gift  !  — 
a  controlling  feature  in  the  case,  entirely  unlike  the  present,  and  if  true, 
proving  very  clearly  that  the  money  might  be  very  honestly  received  and 
retained.  Heath,  J.,  takes  still  a  different  ground ;  that  there  was  neither 
ignorance  nor  mistake  in  the  case,  but  that  the  plaintiff  intended,  in  fact, 
to  make  a  voliintan/  payment  to  his  admiral.  But  what  is  most  material 
to  our  purpose  is,  that  neither  Gibbs  nor  Heath  refers  to  the  conscience  of 
the  case,  and  therefore  are  not  at  issue  with  their  brethren,  nor  with  us, 
upon  this  turning-point  of  the  whole  matter. 

The  Vice-Ciiancellor,  in  the  case  of  Naylor  v.  Winch, ^  remarks,  that  "  If  a 
party,  acting  in  ignorance  of  a  plain  and  settled  principle  of  law,  is  induced 
to  give  up  a  portion  of  his  indisputable  property,  under  the  name  compro- 
mise, a  court  of  equity  will  relieve."  Here,  our  doctrine  is  quite  distinctly 
recognized  :  the  case  supposed  treats  the  retention  of  the  money  as  uncon- 
scientious and  wrong,  and  therefore  the  relief  will  be  given. 

Approved  text-writers  recognize  the  law  to  be  as  we  have  stated. 
Broome,  in  his  treatise  on  Law-maxims,  and  under  the  maxim,  ^'■Ignorantia 
juris  non  excusat,"  says,  "  It  is  therefore  a  rule,  that  money  paid  with  full 
knowledge  of  the  facts,  but  through  ignorance  of  the  law,  is  not  recoverable, 
if  there  be  nothing  unconscientious  in  the  retainer  of  it;"  and  in  support 
of  this  rule,  the  case  of  Brisbane  v.  Dacres  is  cited  ;  and  of  that  case  it  is 
said  that  the  plaintiff  did  not  recover,  because  it  was  not  against  conscience 
for  the  executrix  to  retain  the  money.  And  so,  under  the  maxim,  "  Volenti 
non  fit  injuria"  the  author  states  the  law  thus  :  "  But  where  money  is  paid 
under  a  mistake,  which  there  was  no  ground  to  claim  in  conscience,  tlip 
party  may  recover  it  back  again,  as  money  had  and  received."  And  the 
same  views  of  the  law  on  this  subject  are  expressed  by  Stevens,  in  his  Nihi 
I'rius,  vol.  1,  p.  349,  whether  the  mistake  be  one  of  law  or  fact. 

The  case  of  Bilbie  v.  Lumley  ^  has  been  sometimes  cited  in  opposition  to 
tlie  rule  as  laid  down  in  the  preceding  authorities.  That  case  was  not 
argued;  was  decided  inxtanter ;  and  whether  the  insured  could,  or  could 
not  in  foro  conscientue  retain  the  money,  docs  not  appear,  and  was  not  a 
circumstance  alluded  to  l)y  the  court.  And  wo  say,  in  reply  to  Lord 
Ellenuokough's  reference  to  the  maxim,  Tgnorantia  legis  non  excusat, 
1  1  .Sim.  &  St.  555.  «  2  Mast,  4C9. 


152  NORTHROP'S   EXECUTORS   t.    GRAVES.  [CHAP.  II. 

that  although  the  plaintiff's  ignorance  of  the  law  may  not  furnish  a  good 
excuse  for  his  paying  the  money,  it  does  not  follow  that  it  furnishes  a  good 
excuse  to  the  defendants  to  retain  it,  against  the  suggestions  of  equity  and 
conscience. 

The  case  of  Elliott  v.  Swartwout  ^  does  not  conflict  with  our  views.  The 
money  there  was  paid  over  by  the  importer  to  the  collector,  as  duties,  upon 
a  demand  and  claim  of  right,  and  without  protest.  The  defendant  received 
it  in  good  faith,  and  in  the  same  good  faith  had  paid  it  over  to  the  treasury 
of  the  United  States. 

The  case  of  Stevens  v.  Lynch,'^  to  which  allusion  has  been  made,  was  not 
an  action  to  recover  back  money  paid,  but  upon  a  promise  to  pay,  made  under 
a  mistake  of  the  law.  The  defendant  was  the  drawer  of  a  bill  of  exchange, 
and  as  such,  had  been  legally,  and  was  still  equitably,  bound  to  pay  the 
money  named  in  it  ;  but  being  ignorant  that  his  legal  liability  was  dis- 
charged, by  reason  that  the  holder  had  given  time  to  tlie  acceptor,  yet  he 
had  promised  to  pay  it,  and  was  holden  liable.  This  was  the  case  of  a  mere 
mistake  of  law,  with  the  equity  and  conscience  of  the  case  all  against  him 
who  acted  under  the  mistake,  and  not  in  his  favor,  as  in  the  case  before  us. 
It  was  like  the  case  of  money  paid  in  ignorance  of  the  legal  defence  of  the 
statute  of  limitations,  infancy,  usury,  etc. 

We  have  seen  but  one  case  in  which  the  doctrine  we  adopt  has  been 
directly  denied  by  any  court ;  it  is  Clarke  v.  Dutcher,^  "NVe  need  not  re- 
view it,  because  we  believe  every  authority  referred  to  in  that  case,  in  sup- 
port of  the  opinion  of  the  court,  has  been  now  noticed  by  us  ;  and  we  are 
led  by  them  to  a  very  different  conclusion.  The  reasons  advanced  by  the 
court  there  are  not  satisfactory  to  us,  if  we  understand  them.  They  are, 
that,  if  the  equities  of  the  case  — the  moral  rights  and  duties  of  the  parties 
—  are  to  have  influence  in  the  decision,  it  will  spoil  or  mar  the  n.axim, 
that  "every  man  is  bound  and  presumed  to  know  the  law,"  as  well  as  the 
maxim.  Volenti  non  Jit  injuria ;  and  also,  that  thereby  the  practical  dis- 
tinction between  a  mistake  of  fact  and  a  mistake  of  law,  will  be  destroyed  ; 
both  of  which  assumptions  we  respectfully  deny.  That  a  party  may  not 
urge  his  ignorance  of  the  law  as  an  excuse  or  palliation  of  a  crime,  or  even 
of  a  fault,  we  may  admit ;  that  he  may  not,  by  reason  of  such  ignoraiice  or 
mistake,  obtain  any  right  or  advantage  over  another,  we  may  admit ;  but 
we  do  not  admit  that  such  other  may  obtain  or  secure  an  unjust  advantage 
over  him,  by  reason  of  his  ignorance  or  mistake,  even  of  tl)e  law.  We 
agree  that  men  should  not  complain  of  the  consequences  of  their  delib- 
erate and  voluntary  acts ;  but  we  do  not  agree  that  acts  performed  under 
the  influence  of  essential  and  controlling  mistakes  are  voluntary,  within 
the  meaning  of  the  maxim  referred  to.  And  we  say  that  neither  max- 
ims of  law  nor  fictions  of  law  should  be  so  applied  as  to  work  manifest 
injustice. 

^  10  Pet.  138.  3  12  East,  37.  «  9  Cow.  674. 


SECT.  I.]  CULBREATH  V.   CULBREATH.  153 

We  conclude,  therefore,  with  entire  unanimity,  that  the  charge  of  the 
court,  in  this  respect,  ought  to  be  sauctioued. 

Another  question  is  suggested  by  this  motion,  and  was  mentioned  in 
argument,  —  that  if  this  mouey  was  paid  by  the  plaintiffs,  in  their  capacity 
of  executors  of  Xorthrop's  estate,  from  the  funds  of  his  estate,  under  a  mis- 
taken construction  of  tlie  will,  and  thus  under  a  mistake  of  law,  whether 
it  could  not  be  recovered  back,  for  the  benefit  of  the  estate,  whatever  the 
law  might  be,  if  the  plaintiffs  had  acted  merely  on  their  own  individual 
account,  as  we  have  here  treated  it  1  This  is,  certainly,  a  question  worthy 
of  consideration ;  but  the  opinion  already  expressed  by  us  renders  a  deci- 
sion of  it  unnecessary. 

The  defendant  also  claimed,  in  his  defence,  that  as  the  legacy  was,  by 
the  will  of  the  testator,  payable  to  Mrs.  Graves,  the  defendant's  wife,  and 
was  intended,  as  he  supposed,  fur  her  sole  benefit,  and  was  actually  paid  to 
her,  he  was  not  liable.  But  we  think,  that  in  legal  effect  the  money  was 
received  by  the  defendant ;  although  delivered  i!)to  the  hands  of  the  wife, 
it  was  done  in  his  presence,  with  his  consent,  and  with  his  subsequent 
appi'oval,  and  became  subject  to  his  disposal. 

The  jury  were  instructed  to  allow  interest  on  the  sum  paid,  from  the 
time  it  was  received  by  the  defendant,  on  the  ground  that  it  was  received 
by  him  in  his  own  wrong,  and  should  have  been  immediately  restored. 
But  a  majority  of  the  court  think  differently ;  and  that  no  interest  could 
accrue,  under  the  circumstances,  until  demand  of  repayment  was  made. 
This  excess  of  interest,  therefore,  allowed  by  the  jury,  must  be  remitted  ; 
and  the  court  will  not  direct  a  new  trial. 

In  considering  the  legal  questions  in  this  case,  we  are  necessarily  confined 
to  the  facts  apparent  on  the  record,  and  may  not  indulge  in  any  specula- 
tions into  circumstances  connected  with  the  settlement  of  David  Xorthrop's 
estate,  and  from  which  the  defendant  might  have  considered  himself,  as  ho 
probably  did,  fairly  entitled  to  retain  the  money  thus  received  by  him. 

In  this  opinion  the  other  judges  concurred. 

Part  of  interest  to  he  remitted. 
New  trial  not  to  he  granted. 


WILLIAM    CULBREATH,     Plaimifp    in    EnnoR    v.  JAMES   M.   and 
DANIEL   G.    CULBREATH,    Dbfendaxts. 

In  the  Supreme  Court   of  Georgia,  July  Term,  1849. 

[Reported  in  7  Georgia  Jirports,  64.] 

Odadiah  M.  Culbre.\th  died  intestate,  leaving  neither  wife  nor  children. 
His  nearest  of  kin  were  seven  surviving  brothers  and  sisters,  and  the  children 
of  a  deceased  sister.     William  Culbreath,  tin;  administrator,  under  a  mis- 


154  CULBREATH  V.   CULBREATH.  [CHAP.  II. 

apprehension  of  the  Law,  divided  the  estate  equally  between  the  seven 
brothers  and  sisters,  to  the  exclusion  of  the  children  of  the  deceased  sister. 
Subsequently,  these  children  instituted  suit  against  the  administrator  and 
recovered  the  one-eighth  of  the  estate. 

The  present  action  was  by  William  Culbreath  against  two  of  the  dis- 
tributees, to  recover  back  the  amount  overpaid  on  account  of  this  mistake. 
Upon  an  agreed  statement  of  the  facts  in  the  court  lielow,  the  presiding 
judge  awarded  a  nonsuit  against  the  plaintiff,  who  appealed  to  this  court. 
M.  J.  Crawford  for  plaintiff  in  error. 
£.  R.  Broivn  for  defendant  in  error. 

By  the  Court,  —  Nisbet,  J.,  delivering  the  opinion.  1.  The  judgment  of 
nonsuit  was  awarded  by  the  court  below  in  this  case,  upon  the  following  state 
of  facts,  agreed  upon  by  the  parties  :  "  The  actions  were  founded  upon  a 
voluntary  payment  made  to  each  of  the  defendants  by  the  plaintiff,  as  ad- 
ministrator of  Obadiah  M.  Culbreath,  deceased,  of  one-seventh  part  of  said  in- 
testate's estate,  as  part  of  their  distributive  shares  of  said  estate,  in  ignorance 
of  the  law  of  distribution  of  estates.  After  the  payments,  the  children  of  a 
deceased  sister  of  the  intestate  and  also  of  the  defendants,  in  being  at  the 
time  of  the  payments,  and  known  and  recognized  as  such  children  of  a 
deceased  sister  of  the  intestate  and  of  the  defendants,  brought  suit  against 
the  plaintiff;  as  administrator  aforesaid,  to  recover  their  distributive  share 
of  the  estate  of  said  intestate,  it  being  one-eighth  of  said  estate,  and  did 
recover.  The  suits  now  pending  were  brought  by  the  plaintiff  to  recover 
of  defendants  their  proportion  of  the  over-payment  to  them."  Upon 
the  hearing,  the  presiding  judge  nonsuited  the  plaintiff,  with  leave  to 
move  at  the  next  terra,  to  set  aside  the  nonsuit  and  reinstate  the  cases. 
Which  motion  being  made,  was  refused,  and  to  that  decision  the  plaintiff 
excepted. 

Upon  the  hearing  before  this  court,  it  was  conceded  on  both  sides,  that 
with  a  knowledge  of  all  the  facts  the  plaintiff  acted  upon  a  mistake  of  the 
law.  That  was  considered  as  proven.  Believing  that  the  defendants  were 
entitled  to  the  whole  of  the  estate  of  his  intestate,  to  the  exclusion  of  the 
children  of  his  deceased  sister,  through  a  mistake  as  to  the  law  he  paid  to 
them  the  share  which  was  rightfully  due  to  those  children.  They  having 
sued  and  recovered  of  him  their  distributive  share,  he  brings  these  actions 
to  recover  of  the  defendants  the  money  so  paid  to  them,  through  a  mistake 
of  the  law.  The  question  is,  can  a  party  recover  back  money  paid,  with  a 
knowledge  of  all  the  facts,  through  mistake  of  the  law  1 

We  are  fully  aware  that  the  authorities  upon  this  question  are  in  conflict, 
as  well  in  England  as  in  this  country.  Great  names  and  courts  of  emi- 
nent authority  are  arrayed  on  cither  side.  It  is  not  one  of  those  questions 
upon  which  the  mind  promptly  and  satisfactorily  arrives  at  a  conclusion. 
This  is  true  in  reference  both  to  principle  and  authority.  It  is  not  sur- 
prising, therefore,  that  Judge  Alexander  and  this  court  should  differ.     I 


SECT.  I.]  CULBREATH  V.   CULBREATH.  155 

think,  and  I  shall  try  to  prove,  that  the  weight  of  authority  is  with  us.  If 
it  were  so  —  if  authorities  were  balanced  —  we  feel  justified  in  kicking  the 
beam,  and  ruling  according  to  that  naked  and  changeless  equity  which  for- 
bids that  one  man  should  retain  the  money  of  his  neighbor,  for  which  he 
paid  nothing,  and  for  which  his  neighbor  received  nothing;  an  equity  which 
is  natural,  which  savages  understand,  which  cultivated  reason  approves, 
and  which  Christianity  not  only  sanctions  but  in  a  thousand  forms  has 
ordained.  In  ruling  in  favor  of  these  actions,  we  aim  at  no  visionary  moral 
perfectibility.  We  feel  the  necessity  of  practicable  rules,  by  which  rights 
are  to  be  protected  and  wrongs  redressed.  We  know  the  necessity,  too,  of 
general  rules,  and  how  absurd  would  be  that  attempt,  which  seeks  to  admin- 
ister the  eijuity  which  springs  from  each  and  every  case.  The  insufficiency 
■which  marks  all  lawgivers,  laws,  and  tribunals  of  justice,  makes  that 
a  hopeless  thing.  Still,  where  neither  positive  law  nor  a  well  settled  train 
of  decisions  impose  upon  courts  a  prohibition,  they  are  at  liberty,  nay, 
bound  to  respect  the  authority  of  natural  equity  and  sound  morality. 
Where  these  are  found  on  one  side  of  a  doubtful  question,  they  ought  to 
cast  the  scale.  Moreover,  we  believe  that  the  rule  we  are  about  to  lay 
down  may  be  so  guarded,  as  in  its  application  to  be  both  practicable  and 
politic. 

It  is  difficult  to  say  that  an  action  for  the  recover}'  of  money  paid  by 
mistake  of  the  law  will  not  lie,  upon  those  principles  which  govern  the 
action  of  assumpsit  for  money  had  and  received.  Those  principles  are  well 
settled  since  the  great  case  of  Moses  v.  Macfarlan,  in  2  Burrow,  1005.  The 
grounds  upon  which  that  necessary  and  most  benign  remedy  goes,  are  there 
laid  down  by  Lord  Mansfield.  This  claim  falls  within  the  principles  there 
settled,  and  cannot  be  distinguished  from  cases  which  have  been  ruled  to 
fall  within  them,  but  by  an  arbitrary  exclusion.  I  am  not  now  using  the 
case  of  Moses  v.  Macfixrlan  as  the  authority  of  a  judgment  upon  the  precise 
question  made  in  this  record  ;  although  Lord  Mansfield  there  held,  that 
money  paid  by  mistake  could  be  recovered  back  in  this  action,  without  dis- 
tinguishing between  mistake  of  law  and  fact.  I  refer  to  it,  to  demonstrate 
what  are  the  principles  upon  which  the  action  is  founded.  It  is  not  founded 
upon  the  idea  of  a  contract.  In  answer  to  the  objection,  that  assumpsit 
would  lie  only  upon  a  contract,  express  or  implied,  Lord  Mansfirld  said, 
"  If  the  defendant  be  under  an  obligation,  from  the  ties  of  natural  justice, 
to  refund,  the  law  implies  a  debt,  and  gives  this  action,  founded  in  the 
equity  of  the  plaiutifTs  case,  as  if  it  were  upon  contract."  Again  :  "One 
great  benefit  derived  to  a  suitor  from  the  nature  of  this  action  is,  that  ho 
need  not  state  the  special  circumstances  from  which  he  concludes  that  ex 
aequo  et  bono  the  money  received  by  the  defendant  ought  to  be  doomed 
belonging  to  him." 

"The  defendant,"  says  his  Lordship,  farther,  "may  dofcnd  himself  by 
everything  which  shows  that  the  plaintiff,  ex  cequo  et  />niin,  is  not  entitled 


156  CULBEEATH  V.    CULBEEATH.  [CHAP.  II. 

to  the  whole  of  his  demand,  or  to  any  part  of  it."  His  summary  is  in  the 
followino-  words  :  "  In  one  word,  the  gist  of  this  action  is,  that  the  defend- 
ant, upon  the  circumstances  of  the  case,  is  obliged  by  the  ties  of  natural 
justice  and  equity  to  refund  the  money."  In  the  language  of  the  civilians, 
from  whom  Lord  Mansfield  borrowed  many  valuable  principles,  "Hoc 
natura  cequum  est,  neviinem  cum  alter ius  detrimento  fieri  locnpletiorem." 

If  there  is  justice  in  the  plaintiff's  demand,  and  injustice  or  unconscien- 
tiousness  in  the  defendant's  withholding  it,  the  action  lies  ;  or,  to  use  more 
appropriate  language,  the  law  will  compel  him  to  pay.  Now,  when  money 
is  paid  to  another,  under  a  mistake  as  to  the  payer's  legal  obligation  to 
pay,  and  the  payee's  legal  right  to  receive  it,  and  there  is  no  consideration, 
moral  or  honorary  or  benevolent,  between  the  parties,  by  the  ties  of  natural 
justice  the  payer's  right  to  recover  it  back  is  perfect,  and  the  payee's  obli- 
gation to  refund  is  also  perfect,  —  it  becomes  a  debt.  It  is  a  case  fully 
within  the  range  of  the  ex  aequo  et  bono  rule.  This  is  that  case.  It  falls 
within  none  of  the  exceptions  mentioned  by  Lord  Mansfield.  It  was  not 
paid  as  a  debt  due  in  honor  or  honesty,  as  in  case  of  a  debt  barred  by 
Statute ;  it  is  not  paid  as  a  donation  ;  it  was  not  paid  as  a  debt  con- 
tracted in  violation  of  public  law  ;  for  example,  money  fairly  lost  at  play. 
In  all  such  cases  it  is  conscientious  for  the  defendant  to  keep  it.  In  this 
case  there  is  no  right  or  equity  or  conscience  upon  which  the  defendant 
can  plant  himself.  Why,  then,  is  not  the  case  of  a  payment  by  mistake  of 
the  law  within  the  principles  of  Moses  v.  Macfarlan  ] 

Eight  here  the  argument  might  rest  on  principle.  Just  here  the  onus  is 
cast  upon  the  other  side,  to  show  liow  and  why  this  case  is  distinguishable 
from  other  cases  falling  confessedly  within  the  principles  upon  which  the 
action  for  money  had  and  received  is  based.  We  shall  see  upon  what 
footing  the  distinction  is  placed  by  Lord  Ellenborough.  It  is  that  of 
policy.  The  doctrine  which  I  am  now  repelling  never  was  defended  upon 
principle  ;  it  never  can  be.  No  British  or  American  judge  ever  attempted 
its  defence  on  principle.  It  was  ruled  on  policy,  and  followed  upon  the 
authority  of  a  few  precedents.  A  policy  which,  it  must  be  conceded,  does 
private  wrong,  for  the  sake  of  an  alleged  public  good  ;  or,  I  should  more 
appropriately  say,  rather  than  risk  a  doubtful  public  evil.  It  was,  no 
doubt,  this  view  of  the  subject  which  startled  the  calm  philosophical  equity 
of  Marshall's  mind,  when  yielding,  in  Hunt  v.  Rousemanier,  to  precedent, 
he  still  gave  in  his  personal  protest  against  the  doctrine.  For  what  he  said 
in  that  case  can  be  viewed  in  no  other  light  than  as  a  personal  protest.  It 
is  wise,  it  is  necessary  for  courts  to  yield  to  established  authority  ;  but,  inas- 
much as  the  use  of  precedent  is  to  illustrate  principle,  a  single  precedent, 
or  a  number  of  precedents   should  not  control,  when  they  are   against 

principle. 

We  guard  this  doctrine  by  saying,  that  the  action  is  not  maintainable, 
where   money  is  paid  through  mere  ignorance  of  the  law,  or  in  fulfilment 


SECT.  I.]  CULBREATH  V.    CULBREATH.  157 

of  a  moral  obligatiou,  or  on  a  contract  against  public  law,  or  on  an}'  acconnt 
which  will  make  it  consistent  with  equity  and  good  conscience  for  the 
defendant  to  retain  it.  Nor  does  the  judgment  of  this  court  embrace  cases 
of  concealment,  fraud,  or  misrepresentation.  They  depend  upon  principles 
peculiar  to  themselves.  And  farther,  it  is  scarcely  necessary  to  add  that 
a  recovery  cannot  be  had,  unless  it  is  proven  that  the  plaintiff  acted  upon  a 
mistake  of  the  law. 

2.  There  is  a  clear  and  pi*actical  distinction  between  ignorance  and  mis- 
take of  the  law.^  Much  of  tlie  confusion  in  the  books,  and  iu  the  minds  of 
professional  men,  upon  this  subject,  has  grown  out  of  a  confounding  of  the 
two.  It  may  be  conceded,  that  at  first  view,  the  distinction  is  not  appar- 
ent ;  but  it  is  insisted  that  upon  close  inspection  it  becomes  quite  obvious. 
It  has  been  ridiculed  as  a  quibble,  but  we  shall  see  that  it  has  been  taken 
by  able  men,  and  acted  upon  by  eminent  courts.  Ignorance  implies  pas- 
siveness ;  mistake  implies  action.  Ignorance  does  not  pretend  to  knowl- 
edge, but  mistake  assumes  to  know.  Ignorance  may  be  the  result  of  laches, 
which  is  criminal ;  mistake  argues  diligence,  which  is  commendable.  Mere 
ignorance  is  no  mistake,  but  a  mistake  always  involves  ignorance,  yet  not 
that  alone.  The  difference  may  be  well  illustrated  by  the  case  made  in 
this  record.  If  the  plaintiff,  the  administrator,  had  refused  to  pay  tlie 
distributive  share  in  the  estate  which  he  represented,  to  the  children  of 
his  intestate's  deceased  sister,  upon  the  ground  that  they  were  not  entitled 
in  law,  that  would  have  been  a  case  of  ignorance,  and  he  would  not  be 
heard  for  a  moment  upon  a  plea,  that  being  ignorant  of  the  law  he  is  not 
liable  to  pay  interest  on  their  money  in  his  hands.  But  the  case  is,  that 
he  was  not  only  ignorant  of  their  right  in  law,  but  believed  that  the  de- 
fendants were  entitled  to  their  exclusion,  and  acted  upon  that  belief,  by 
paying  the  money  to  them.  The  ignorance  in  tliis  case  of  their  right,  and 
the  belief  in  the  right  of  the  defendants,  and  action  on  that  belief,  consti- 
tute the  mistake. 

The  distinction  is  a  practical  one,  in  this,  that  mere  ignorance  of  the  law 
is  not  susceptible  of  proof.  Proof  cannot  reach  the  convictions  of  the 
mind,  undeveloped  in  action  ;  whereas,  a  mistake  of  the  law,  developed  in 
overt  acts,  is  capable  of  proof,  like  otlier  facts. 

3.  The  usual  reply  to  all  this  is  the  time-honored  maxim,  if/norauti<t 
juris  non  excusat.  "We  do  not  make  void  this  maxim  in  any  fair  construction 
of  it.  It  is  an  indispensable  rule  of  legal  and  social  policy  :  it  is  that 
without  which  crime  could  not  be  punislied,  right  asserted,  or  wrong 
redressed.  What  if  its  application  does,  iu  some  cases,  work  injustice] 
Its  overruling  necessitj',  and  the  vast  preponderence  of  its  benefits  over  its 
evils,  have  reconciled  the  civilized  world  to  its  immovable  status  us  a  rule 
of  action.     The  idea  of  excuse  implies  delinquency.     No  man  can  be  ex- 

1  Lawrence  v.  Reaulden,  2  B:ii.  C23  ;  Ilultoii  v.  E<lg.,Tton,  C  S.  C.  485,  accorJ. ;  Jacobs 
V.  Morangc,  47  N.  Y.  57,  contra.  —  Ed. 


158  CULBREATH  V.   CULBREATH.  [CHAP.  II. 

cused  upon  a  plea  of  ignorance  of  the  law,  for  disobeying  its  injunctions  or 
violating  its  provisions  or  abiding  his  just  contracts.  He  is  presumed  to 
know  the  law,  and  if  he  does  not  know  it,  he  is  equally  presumed  to  be 
delinquent.  I  remark,  to  avoid  misconstruction,  that  it  is  of  universal 
application  in  criminal  cases.  In  civil  matters,  it  ought  not  to  be  xised  to 
effectuate  a  wrong.  That  is  to  say,  it  cannot  be  a  sufficient  response  to  the 
claim  of  an  injured  person,  that  he  has  been  injured  by  his  own  mistake  of 
the  law,  when  the  respondent,  against  conscience,  is  the  holder  of  an  advan- 
tage resulting  from  that  mistake.  The  meaning,  then,  of  this  maxim  is 
this  :  no  man  can  shelter  himself  from  the  punishment  due  to  crime,  or 
excuse  a  wrong  done  to,  or  a  right  withheld  from  another,  under  a  plea  of 
ignorance  of  the  law.  The  maxim  contemplates  the  punishment  of  crime, 
the  redress  of  wrong,  and  the  protection  of  rights.  Is  it  not  unreasonable 
so  to  construe  it  as  to  apply  it  to  .one  who  has  not  only  done  no  wrong  and 
withheld  no  right,  but  is  himself  the  injured  party,  as  in  this  easel  The 
plaintiff  has  violated  no  law,  withheld  no  right  from  the  defendants,  and  in 
no  particular  wronged  them;  but  on  the  contrary,  he  has  been  injured  to 
the  extent  of  the  money  which  they  unrighteously  withhold  from  him.  In 
this  view  of  it,  too,  the  public  policy  of  the  maxim  is  sustained.  I  cannot 
see  that  its  utility  is  lessened  by  this  limitation  of  its  application.  In  tlie 
language  of  Sir  W.  D.  Evans,  "  The  effect  of  the  doctrine  is  carried  suffi- 
ciently far  for  the  purposes  of  public  utility,  by  holding  that  no  man  shall 
exempt  himself  from  a  duty,  or  shelter  himself  from  the  consequences  of 
infringing  a  prohibition  imposed  by  law,  or  acquire  an  advantage  in  opposi- 
tion to  the  legal  rights  and  interests  of  another,  by  pretending  error  or 
ignorance  of  the  law."  * 

The  distinction  between  ignorance  and  mistake  of  the  law,  is  recognized 
by  Lord  Roslyn  in  Fletcher  v.  Talbot ;  ^  b}'^  Lord  Manners,  in  Leonard  v. 
Leonard  ;  ^  by  the  Court  of  Appeals  of  South  Carolina,  in  Lawrence  v. 
Bedubien  ;*  and  in  the  Executors  of  Hopkins  v.  Mazj'ck  et  al} 

In  England,  the  authorities  are  pretty  nearly  in  equilibrio,  yet  I  must 
think  that  the  preponderance,  taking  the  cases  at  law  and  in  equity  to- 
gether, is  on  the  side  of  the  principle  which  I  am  laboring  to  establish.  This 
action  for  money  had  and  received  is  an  equitable  remedy,  and  lies  gener- 
ally where  a  bill  will  lie  ;  decisions,  therefore,  in  Chancery  which  recognize 
the  principle  may  be  justly  held  to  sustain  it.  The  first  case,  then,  in 
order  of  time,  is  that  of  Lansdowne  v.  Lansdowne,  reported  in  Mosele}',  364, 
decided  by  Loi-d  Chancellor  King.  That  case  was  this :  The  second  of 
four  brothers  died  seised  of  land,  and  the  eldest  entered  upon  it.  But  the 
youngest  also  claimed  it.  They  agreed  to  leave  the  question  of  inheritance 
to  one  Hughes,  a  schoolmaster,  who  determined  against  the  eldest  brother, 
on   the   ground   that   lands   could   not   ascend.     Whereupon,   the   eldest 

1  2  Poth.  Ob.  App.  297.  2  5  Ves.  14.  3  2  BaU  &  B.  180,  183. 

*  2  Bai.  623.  6  1  Hill  Ch.  251. 


SECT.  I.]  CULBREATH  V.   CULBREATH.  159 

agreed  to  divide  the  estate,  and  deeds  were  executed  accordingly.  Lord 
KixG  decreed  that  they  should  be  delivered  up  and  cancelled,  as  having 
been  obtained  by  mistake.  There  is  no  doubt  whatever,  but  the  mistake 
was  one  of  law  as  to  the  legal  rights  of  the  elder  brother.  It  is  a  case  iu 
point.  It  is  true  that  it  has  been  greatly  criticised.  Moseley,  the  reporter, 
has  been  charged  with  inaccuracy,  and  was  very  much  in  disfavor  with 
Lord  Mansfield.  Indeed,  it  is  said  that  his  Lordship  did,  on  one  occasion, 
order  his  reports  not  to  be  read  before  him.  Yet  there  stands  the  case, 
and  if  supported  by  nothing  else,  it  is  sustained  by  its  reasonableness. 
Judge  Marshall,  in  referring  to  it,  says,  that  it  cannot  be  wholly  dis- 
regai-ded. 

The  case  of  Bize  v.  Dickason  was  decided  by  Lord  Mansfield  in  the 
Court  of  King's  Bench.  The  judgment  of  the  court  was  delivered  as 
follows  :  "  The  rule  has  always  been,  that  if  a  man  has  actually  paid  what 
the  law  would  not  have  compelled  him  to  pay,  but  what  in  equity  and  con- 
science he  ought,  he  cannot  recover  it  back  again  in  an  action  for  money 
had  and  received.  So,  where  a  man  has  paid  a  debt  which  would  otherwise 
have  been  barred  by  the  Statute  of  Limitations,  or  a  debt  contracted  dur- 
ing his  infancy,  which  in  justice  he  ought  to  discharge,  though  the  law 
would  not  have  compelled  the  payment,  yet,  the  money  being  paid,  it  will 
not  oblige  the  payee  to  refund  it ;  but  where  money  is  paid  under  a  mis- 
take, which  there  was  no  ground  to  claim  in  conscience,  the  party  may 
recover  it  back  again  in  this  kind  of  action."  ^ 

This  authority  is  incontrovertible,  and  has  not  been  controverted.  The 
case  made  shows  a  mistake  of  law.  The  mistake  spoken  of  by  Lord 
Mansfield  could  not  have  been  a  mistake  of  facts,  because  the  case  exhibits 
no  mistake  of  facts,  but  does  exhibit  a  mistake  of  the  law. 

The  principle  was  sustained  by  a  decree  in  Bingham  v.  Bingham.'' 
There  the  bill  was  filed  on  the  ground  of  a  mistake  in  law.  The  Master 
of  the  Rolls  said,  "  Though  no  fraud  appeared,  and  the  defendant  appre- 
hended he  had  a  right,  yet  it  was  a  plain  mistake,  such  as  the  court  was 
warranted  to  relieve  against,  and  not  to  suffer  the  defendant  to  run  away 
with  the  money  in  consideration  of  the  sale  of  an  estate  to  which  he  had 
no  right."  See  the  note  to  this  case  in  Belt's  Supi)lement,  79,  which 
shows  the  mistake  to  have  been  one  of  law.  Also  recognized  in  Turner 
V.  Turner  ;'  in  Leonard  v.  Leonard  *  by  Lord  Mannkus  ;  by  Lord  Thuulow, 
in  Jones  v.  Morgan,*  and  by  Lord  Eldon,  in  Stockly  v.  Stockly,'  and  iu 
Anchor  v.  The  Bank  of  England.^ 

To  these  authorities  may  be  added  the  dicta  of  Lord  Ch.  J.  I)k  (Jhky,  in 
Farmer  v.  Arundel,*  who  declared,  "  That  where  money  is  paid  by  one  man 
to  another  on  a  mistake  either  of  fact  or  of  law,  or  by  deceit,  tliis  action 

1  1  T.  W.  2S.-..  2  1   Ves.  126.  «  2  Ch.  R.  154. 

♦  Hall  &  I!.  171.  M  I'.ro,  C.  C.  219.  o  1  Vcs.  &  Bea.  23,  31. 

T  Dou"   «:«.  »  2  I  Hack.  K.  821. 


160  CULBREATH  V.   CULBREATH.  [CHAP.  II. 

will  certainly  lie."  Of  Lord  Kenyox,  in  the  case  of  Chat  field  and  Paxton,^ 
and  of  Chambre,  J.,  in  Brisbane  v.  Dacres.^  This  judge,  arguing  the  point 
with  great  strength,  says,  "It  seems  to  me  a  most  dangerous  doctrine, 
that  a  man  getting  possession  of  money  to  any  extent,  in  consequence  of 
another  party's  ignorance  of  the  law,  cannot  be  called  on  to  repay  it." 
He  illustrates  by  putting  the  very  case  made  in  principle  in  this  record. 
"  Suppose,"  says  he,  "  an  administrator  pays  money  per  capita,  in  misappli- 
cation of  the  effects  of  the  intestate,  shall  it  be  said  that  he  cannot  recover 
it  back  1 " 

Opposed  to  this  weight  of  authority  in  England,  stand  the  two  cases  of 
Bilbie  v.  Lumley,^  and  Brisbane  v.  Dacres,* — in  the  latter  case  Chambre,  J., 
dissenting,  —  and  the  obiter  opinion  of  Buller,  J. 

It  is  worthy  of  remark,  that  Lord  Ellexborough,  who  presided  in  Bilbie 
V.  Lumley,  afterwards  in  Perrott  v.  Perrott  ^  holds  language  irreconcilable 
with  his  opinion  in  that  case.  In  the  latter  case,  he  is  reported  to  say, 
"  Mrs.  Territ  either  mistook  the  contents  of  her  will,  which  would  be  a 
mistake  in  fact,  or  its  legal  operation,  which  would  be  a  mistake  in  law,  and 
in  either  case  we  think  the  mistake  annulled  the  cancellation."  Thus  it  is 
manifest  that  our  judgment  in  this  case  is  not  without  precedent  in  the 
English  books. 

The  authority  of  Bilbie  v.  Lumley  has  been  followed  In  this  country,  by 
Chancellor  Kent,  Shotwell  v.  Mundy ;  ^  Lyon  v.  Richmond,'  and  by  the 
Supreme  Court,  in  Hunt  v.  Rousmanier.*  In  the  same  case,  however,  in 
8  Wheat.  215,  Ch.  J.  Marshall  says,  "Although  we  do  not  find  the  naked 
principle,  that  relief  may  be  granted  on  account  of  ignorance  of  the  law, 
asserted  in  the  books,  we  find  no  case  in  which  it  has  been  decided  that  a 
plain  and  acknowledged  mistake  in  law  is  beyond  the  reach  of  equity."  The 
case  in  1  Peters,  1,  was  decided,  however,  upon  other  principles  than  that  one 
now  under  discussion.  The  same  may  be  said  of  the  cases  in  Johnson's 
Chancery  Reports,  above  referred  to.  Yet  it  may  not  be  denied  but  that 
the  courts  there  recognize  the  rule  as  settled  in  Bilbie  v.  Lumley.  It  may 
be  questioned  whether  the  recognition  qf  that  authority  by  the  Supreme 
Court  is  worth  as  much  as  the  opinion  of  Ch.  J.  Marshall,  intimated  so 
plainly  in  the  above  extract,  as  to  the  rule  in  Chancery.  The  leaning  of 
Mr.  J.  Story,  in  his  Commentaries  on  Equity,  is  the  same  way  ;  and  yet  he 
says,  "  It  has  been  laid  down  as  unquestionable  doctrine,  that  if  a  party, 
acting  in  ignorance  of  a  plain  and  settled  principle  of  law,  is  induced  to 
give  up  a  portion  of  his  indisputable  property  to  another,  under  the  name 
of  a  compromise,  a  court  of  equity  will  relieve  him  from  the  effect  of  his 
mistake."  ^ 

Why  it  is  that  a  party  may  be  relieved  from  the  consequences  of  a  mis- 

1  See  Chitty  on  Bills,  102.  2  5  Taunt.  157.  »  2  East,  469. 

*  5  Taunt.  157.  *  14  East,  423.  «  1  Johns.  512. 

»  2  Johns.  51;  6  Johns.  169,  170.         «  1  Pet.  1.  »  1  Story  Eq.  Jur.  §  121. 


SECT.  I.]  CULBREATII  V.   CULBREATH.  161 

take  of  the  law,  where  he  gives  up  his  property,  under  the  name  of  a 
compromise,  and  not  under  other  circumstances,  it  is  difficult  to  see. 

Mistake  of  the  law  lias  been  held  without  relief  in  Illinois  ;  ^  in  Tennes- 
see ;  ^  in  New  Jersey ; '  and  in  Alabama ;  *  and  it  may  be  elsewhere,  be- 
yond my  time  for  ascertainment. 

The  contrary  was  expressly  ruled  by  the  Court  of  Appeals  in  South 
Carolina,  in  Lowndes  v.  Chisolm,^  in  1827.  This  was  followed  by  the  great 
case  before  the  same  court  in  1832,  of  Lawrence  v.  Beaubien.  I  call  it 
great,  because  of  the  affluence  of  learning  displayed  in  the  argument  by 
Messrs.  Holmes  and  King  on  one  side,  and  Pettigru  and  Bailey  on  the 
other,  and  because  of  the  perspicuous  condensation  and  ability  of  the 
opinion  of  Mr.  J.  Johnson.  The  doctrine,  in  all  its  bearings,  is  there  dis- 
cussed with  extraordinary  power,  and  the  court  unanimously  decided,  that 
*'  A  mistake  of  law  is  a  ground  of  relief  from  the  obligations  of  a  contract, 
by  which  one  party  acquired  nothing,  and  the  other  neither  parted  with 
any  right  nor  suffered  any  loss,  and  which,  ex  cequo  et  bono,  ought  not  to 
be  binding ;  and  that  it  makes  no  difference  that  the  parties  were  fully  and 
correctly  informed  of  the  facts,  and  the  mistake  as  to  the  law  was  recipro- 
cal ;  but  there  must  be  evidence  of  a  palpable  mistake,  and  not  mere 
ignorance  of  the  law."  The  case  of  Lawrence  v.  Beaubien  was  reviewed  in 
1833,  by  the  Court  of  Appeals,  in  Executors  of  Hopkins  v.  Mazyek  and 
others,  and  its  doctrines  affirmed.®  So  that  in  South  Carolina  the  question 
is  definitely  settled.  So,  also,  in  Massachusetts,  in  the  same  way.  See 
May  V.  Coffin  ;  ^  Warder  v.  Tucker ; «  Freeman  v.  Boynton.'  See,  *l80. 
Haven  v.  Foster." 

The  writers  on  the  civil  law  are  divided  as  to  the  question  whether 
money  paid  tnider  a  mistake  of  the  law  is  liable  to  repetition.  Vinnius 
and  D'Aguesseau  hold  the  affirmative  ;  so  Sir  W.  D.  Evans.  The  argu- 
ment of  the  great  French  Chancellor,  D'Aguesseau,  is,  to  my  mind,  unan- 
swerable." Pothier  and  Heineccius  maintain  the  negative ;  and  it  is  said 
that  the  text  of  the  Roman  Law  is  with  them.  See  Rogers  v.  Atkinson ; " 
Collier  V.  Lanier." 

Let  the  judgment  of  the  court  below  be  reversed. 

1  3  Oilman,  162.  2  g  Yerg.  298.  »  1  Green  Oh.  145. 

*  9  Ala.  662.  6  2  McCor.l  Ch.  455.  «  1  Hill  Ch.  242. 

7  4  Mass.  342.  »  7  Mass.  452.  9  7  Mass.  488. 

10  9  Pick.  112.  "2  Ev.  Poth.,  App.  308.  "  1  Kelly,  25,  26. 
"  1  Kelly,  238. 


11 


162  PITCHER   V.   THE   TURIN   PLANK   ROAD   COMPANY.      [CHAP.  II. 

PITCHER  V.   THE  TUEIN   PLANK  EOAD   COMPANY. 
In  the  Supreme  Court  of  New  York,  January  6,  1851, 

[Reported  in  10  Barbour,  436.] 

This  was  an  appeal  by  the  defendants  from  a  judgment  of  the  county 
court  of  Lewis  county,  affirming  the  judgment  of  a  justice  of  the  peace. 
The  action  was  brought  by  the  plaintiff,  after  attaining  full  age,  to  avoid 
au  agreement  made  during  infancy  for  the  compromise  of  a  suit  with  which 
he  was  threatened,  and  to  recover  back  money  paid  in  pursuance  of  such 
agreement.  The  justice  rendered  a  judgment  in  favor  of  the  plaintiff  for 
$10  and  costs. 

Alanson  Barnes,  for  the  plaintiff. 

E.  A.  Brown,  for  the  defendant. 

Gridley,  P,  J.  The  plaintiff  in  the  justice's  court  sued  the  plank  road 
company  to  recover  back  the  sum  of  $10,  which  he  had  paid  to  compromise 
or  settle  a  threatened  suit  against  him,  for  the  penalty  of  $25  for  running 
the  gate  of  the  defendant.  It  is  true  the  plaintiff  would  be  liable  at  com- 
mon law  for  the  trespass;  but  the  justice  must  have  found  that  the  com- 
promise was  made  under  the  mistaken  supposition  that  he  was  liable  for 
the  penalty  of  $25  ;  and  that  finding,  even  if  founded  on  less  conclusive 
evidence  than  it  is,  would  be  binding  on  this  court.  Noyes  v.  Hewitt ;  ^ 
Stryker  v.  Bergen.'' 

The  mistake  was  mutual ;  both  the  agent  of  the  company  and  the  plain- 
tiff supposed  that  the  clause  giving  the  penalty,  in  the  turnpike  act,  had 
been  incorporated  into  the  plank  road  act,  of  1847.  The  mistake  therefore 
was  not  a  pure  mistake  of  law.  It  was  in  one  sense  a  mistake  of  foct. 
Neither  party  supposed  that  a  penalty  of  $25  was  given  by  the  common 
law.  Neither  party  had  any  doubt  that  if  the  statute  had  given  a  penalty 
for  running  a  gate  situated  on  a  plank  road,  the  penalty  was  collectible. 
Both  parties  assumed  that  a  section  giving  the  penalty  had  been  incorporated 
into  the  plank  road  act.  In  that  assumption  they  were  mistaken.  It  can- 
not be  doubted  that  this  mistaken  belief  was  a  powerful  motive  with  the 
plaintiff  in  making  the  settlement.  If  he  could  compromise  a  liability  for 
$25  by  the  payment  of  $10,  we  can  all  see  it  would  be  a  wise  and  prudent 
act  to  do  so.  Whereas  he  might  be  willing  to  take  his  chance  of  a  suit  at 
common  law,  where  the  damages  might  be  nominal  only. 

No  one  will  dispute  the  general  proposition  that  ignorance  of  the  law 
excuses  no  one,  —  every  man  being  presumed  to  know  the  law.  But  I  do 
not  think  that  rule  applies  to  the  present  case.     This,  as  I  before  remarked, 

1  18  Wend.  141.  «  15  "Wend.  490. 


SECT.  I.]        riTCHER   V.   THE   TURIN   PLANK   ROAD   COMPANY.  163 

is  not  a  case  of  pure  mistake  of  law.  It  was  a  compromise  of  a  claim  for 
a  penalty,  which  the  law  did  not  give.  It  was  not  a  compromise  of  a 
doubtful  claim,  but  of  a  claim  for  which  there  was  no  foundation  at  all, 
when  it  was  ascertained  that  the  penalty  in  question  had  not  been  applied 
to  plank  roads.  It  was  a  case  where  the  settlement  was  made  under  the 
mistaken  idea  that  the  act  giving  the  penalty  had  been  applied  to  plank 
roads.  In  such  cases  the  rule  that  no  man  is  excused  by  reason  of  ignorance 
of  the  law  does  not  apply.  The  daughter  of  a  freeman  of  London  had  a 
legacy  of  £10,000  left  her  by  the  will  of  her  fether,  on  condition  she  should 
release  her  orphanage  share.  She  accepted  the  legacy  and  executed  the 
release.  This  release  was  set  aside,  although  no  fraud  was  imputed  to  the 
executor,  the  orphanage  share  being  £40,000.  Judge  Story  says  "  it  was 
a  case  of  clear  surprise  in  matters  of  fact  as  well  as  law."  ^  So  in  Evans  v. 
Llewellyn,^  the  decision  was  placed  entirely  on  the  ground  of  surprise, 
"  the  conveyance  having  been  obtained  and  executed  improvidently." 
Lord  Kenyox  said  "The  party  was  taken  by  surprise.  He  had  not  suf- 
ficient time  to  act  with  caution,  and  therefore,  though  there  was  no  actual 
fraud,  it  was  something  like  fraud,  for  an  undue  advantage  was  taken  of 
his  situation.  I  am  of  opinion  that  the  party  was  not  competent  to  protect 
himself."  The  application  of  this  doctrine  to  tlie  case  under  consideration 
will  be  apparent  when  we  remember  that  one  of  the  parties  was  an  infant, 
and  the  other  party  was  threatening  to  make  him  pay  the  $25  "  or  put 
him  through  on  it,"  unless  he  paid  the  $10. 

Again  :  where  one  has  a  clear  title,  and  under  the  idea  of  a  compromise 
gives  away  a  part  of  what  was  by  law  his  own,  he  is  entitled  to  relief.  Not 
however  where  there  is  a  disputed  question,  and  the  compromise  is  fair. 
Judge  Story  says,  "  In  the  former  cases  the  party  seems  to  labor,  in  some 
sort,  under  a  mistake  of  fact  as  well  as  of  law.  He  supposes  as  a  matter 
of  fact,  that  he  has  no  title,  and  that  the  other  party  has  a  title  to  the 
property."^  In  this  case  the  plank  road  company  claimed  to  have  a  clear 
right  to  the  penalty  of  $25  ;  and  the  plaintiff  was  induced  to  believe  that 
they  had  such  a  right,  by  the  mistaken  supposition  that  such  a  claim  was 
made  applicable  to  the  plank  road  act.  Now  when  it  turns  out  that  this 
was  a  common  error  of  both  parties,  the  plaintifT  is  entitled  to  reUef,  on 
the  groinid  that  the  mistake  was  one  rather  of  fact  than  of  law. 

The  decision  may  well  rest  upon  the  ground  on  which  the  county  judga 
has  placed  it ;  viz.  that  this  is  a  case  where  the  acts  of  the  infant  may  bo 
inquired  into  for  the  purpose  of  seeing  whether  they  are  beneficial  to  hia 
interest,  or  not.  This  has  been  done  by  the  justice,  who  determined  that 
the  settlement  or  compromise  was  not  benclicial  to  his  interests,  and  set 
it  aside.  In  the  case  of  Keane  v.  Boycott,*  Lord  Chief  Justice  Kvrk  laid 
down  the  rule  that  when  the  court  could  pronounce  the  contract  to  be  foB 

1  Story  Eq.  Jiir.  §§  117,  118.  ^  Story  E.].  Jiir.  §  119. 

»  Story  E-i-  Jiir.  §  130.  *  2  II.  IJluck.  511. 


164  AENOLD    &    DUBOSE   V.   GEO.   RR.    AND   BANKING   CO.      [CHAP.  II. 

the  benefit  of  the  infant,  as  for  necessaries,  it  was  good ;  when  the  court  could 
pronounce  it  to  be  for  the  prejudice  of  the  infant,  it  was  void ;  and  in  those 
cases  where  the  benefit  or  prejudice  was  uncertain,  the  conti-act  was  voida- 
ble only.  In  the  case  of  Grace  v.  Wilber,^  it  was  held  that  an  infant  was 
not  liable  to  be  enrolled  in  the  militia,  while  under  eighteen  years  of  age. 
And  though  he  agrees,  with  the  consent  of  his  father,  to  serve  as  a  substi- 
tute for  another,  in  consideration  of  a  certain  sum  of  money,  which  is  paid, 
such  a  contiTict  is  not  binding  on  the  infant ;  and,  the  infant  having  deserted 
and  having  been  apprehended  as  a  deserter,  brought  his  action  for  trespass 
and  false  imprisonment  against  the  officer  arresting  him,  and  recovered. 
Now  upon  these  authoi'itics,  it  was  for  the  justice  to  decide  whether  the 
$10  were  paid  to  settle  the  claim  for  the  penalty,  or  to  settle  the  whole 
claim  against  the  plaintiff,  for  trespass  at  common  law  for  running  through 
the  gate.  He  has  found,  as  we  must  conclude,  that  the  money  was  paid 
solely  to  settle  the  claim  for  the  penalty,  when  no  law  existed  making  him 
liable  to  a  penalty.  Having  come  to  that  conclusion,  he  must  have  held 
that  a  settlement  of  a  claim  which  had  no  legal  existence,  and  the  contract 
for  the  payment  of  $10,  in  liquidation  of  such  a  claim,  was  not  beneficial 
to  the  infant.  If  the  justice  held  thus,  and  -we  must  presume  that  he  did, 
then  we  are  not  at  liberty  to  review  his  judgment.  There  was  at  least 
some  evidence  on  which  he  founded  his  judgment.  See  18  Wend.  141. 
This  decision  the  county  judge  held  to  be  binding  on  him;  and  we  must 

regard  it  as  conclusive  upon  us. 

Judgment  affirmed. 


ARNOLD    &    DUBOSE,    Plaintiffs    in    Error,    v.    THE    GEORGIA 
RAILROAD   AND   BANKING   COMPANY,  Defendant  in  Error. 

In  the  Supreme  Court  of  Georgia,  July  Term,  1873. 

[Reported  in  50  Georgia  Reports,  .304.] 

Railroads.  Venue.  Charter.  Freight.  Contracts.  Before  Judge 
Andrews.     Wilkes  Superior  Court.     May  Term,  1873. 

Arnold  &  DuBose  brought  complaint  against  the  Georgia  Railroad  and 
Banking  Company  for  82362.50,  overcharge  in  freight  on  3,150,000  pounds 
of  cotton,  shipped  on  the  cars  of  the  defendant  for  a  distance  of  75  miles. 
The  defendant  pleaded  the  general  issue  and  to  the  jurisdiction  of  Wilkes 
Superior  Court. 

The  evidence  made  the  following  case  :  The  amount  of  cotton  was  shipped, 
as  alleged,  at  Washington,  Wilkes  county,  to  be  conveyed  by  the  defendant 
to  Augusta,  Richmond  county,  a  distance  of  75  miles.  The  freight  charged 
by  the  defendant  was  forty-five  cents  per  100  pounds.     The  freight  had 

1  10  Johns.  455. 


SECT.  I.]   ARNOLD  &    DUBOSE  V.   GEO.  RR.  AND  BANKING  CO.     165 

been  paid  in  Augusta.  The  ageut  of  defendant  at  Washington  had  no 
instructions  to  receive  freight  or  to  refuse  it.  Had  it  been  ofiered  he  would 
have  received  it.  The  former  charge  was  thirty-tliree  cents  per  100  pounds; 
from  the  year  18G5  to  the  present  time,  during  which  period  phiintitrs 
cotton  was  shipped,  the  charge  has  been  at  the  rate  of  forty-five  cents  per 
100  pounds.  The  charge  by  wagon,  before  tlie  raihoad  was  built,  was  fifty 
cents  per  100  pounds.  The  plaintiffs,  before  the  commencement  of  suit, 
demanded  from  the  defendants  seven  and  one-half  cents  on  each  100  pounds 
of  cotton  shipped,  as  being  an  overcharge  and  illegal,  under  its  charter. 
Payment  was  refused. 

It  was  agi-eed  that  the  case  should  go  to  the  jury  on  both  pleas,  subject 
to  the  charge  of  the  court. 

The  court  charged  that  under  the  facts  proved,  the  Superior  Court  of 
Wilkes  county  had  no  jurisdiction  of  the  case;  that  if  said  court  did  have 
jurisdiction,  there  was  nothing  in  the  charter  of  the  defendant  ])rohibiting 
the  charges  of  freight  as  made. 

The  jury  returned  a  verdict  for  the  defendant. 

The  plaintiffs  except  to  the  aforesaid  charge  of  the  court,  both  as  to 
jurisdiction  and  as  to  the  construction  of  the  charter  of  the  defendant. 

li.  Toombs,  for  plaintiffs  in  error. 

W.  M.  dh  M.  P.  Reese,  W.  H.  Hull,  E.  H.  Pottle,  Hillyer  d'  Brother,  for 
defendant. 

Trippe,  Judge.  3.  The  defendant  further  insists,  that  even  if  the  amount 
charged  and  paid  by  plaintiffs  was  beyond  the  charter  rates,  yet  it  was  paid 
voluntarily  by  them,  and  that  there  was  no  artifice,  fraud,  or  deception  on 
the  part  of  defendant.  This  presents  the  question  whether  money,  paid 
voluntarily  by  one  party  to  another,  with  knowledge  of  all  the  facts,  can  be 
recovered  back,  on  the  ground  that  the  party  receiving  the  money  could  not 
have  enforced  payment  by  law.^  No  one  will  deny  that  if  the  party  so  paying 
did  so  with  knowledge  that  it  could  not  have  been  collected  by  legal  pro- 
cess, he  cannot  recover  it  back.  Money  paid  for  a  gaming  debt  is  an  excep- 
tion, by  special  statute.  Usury  paid  is  another  exception ;  but  that  not 
to  the  extent  to  which  the  party  paying  could  have,  by  law,  prevented  its 
collection.  He  could,  by  setting  up  the  defence  of  usury,  defeat  the  collec- 
tion of  all  but  the  original  principal.  If  he  voluntarily  pay  principal  and 
usury,  he  could  only  recover  back  tlie  excess  of  the  usury  over  the  legal 
interest.  I  speak  of  the  law  as  it  formerly  stood  ;  and  even  when,  by 
statute,  the  whole  contract  was  void  on  account  of  usury,  still  if  the  debtor 
paid  the  whole,  he  could  reclaim  nothing  but  what  was  over  the  lawful 
interest.  'I'he  authorities  to  the  effect  that  money  j)aid  voluntarily,  without 
mistake  of  fact,  though  in  ignorance  of  the  law,  cannot  be  recovered  back, 
are  numerous  and  almost  without  exception.     In  Culhrcath  v.  Cull)reath,* 

*  Only  so  much  of  tlie  o])iiii()ii  is  given  as  iclalcs  to  lliis  (juestion.  —  Ki). 
«  7  Ga.  04. 


166  ARNOLD    &   DUBOSE   V.   GEO.   RR.    AND   BANKING   CO.      [CHAP.  II. 

in  an  elaborate  decision  showing  that  there  might  be  a  recovery  where  it 
was  paid  under  a  mistake  of  law,  the  principle  is  yet  admitted  that  if  it 
be  from  ignorance  of  law,  there  can  be  no  recovery.  And  the  great  effort 
in  that  case  is  to  set  up  and  show  that  there  is  a  difference  between  igno- 
rance and  mistake  of  the  law.  This  principle  has  been,  to  a  certain  extent, 
embodied  in  the  Code:  see  sections  3121  to  3126,  inclusive,  new  Code. 
Section  3121  is,  "Mere  ignorance  of  the  law  on  the  part  of  the  party  him- 
self, where  the  facts  are  all  known,  and  there  is  no  misplaced  confidence, 
and  no  artifice,  or  deception,  or  fraudulent  practice  is  used  by  the  other 
party  either  to  induce  the  mistake  of  law,  or  to  prevent  its  correction,  will 
not  authorize  the  intervention  of  equity."  Section  2G36  provides,  "mistake 
of  law,  if  not  brought  about  by  the  other  party,  is  no  ground  for  annulling 
a  contract  of  sale.  Mistake  of  a  material  fact  may,  in  some  cases,  justify 
a  rescission  of  the  contract ;  mere  ignorance  of  a  fact  will  not."  A  strong 
•writer  has  said  that  to  allow  the  doctrine  that  ignorance  of  law  is  a  ground 
of  defence,  would  overturn  the  foundations  of  every  system  of  j  urisprudence  :  ^ 
and  Judge  Story  says :  "  As  every  man  is  presumed  to  know  the  law,  and 
to  act  upon  the  rights  which  it  confers,  when  he  knows  the  facts,  it  is 
culpable  negligence  in  him  to  do  an  act  or  make  a  contract,  and  then  set 
up  his  ignorance  as  a  defence."  ^  A  few  of  the  numerous  cases  determining 
the  principle  involved  in  this  case  are  simply  referred  to.' 

It  is  true  that  in  some  of  those  cases  no  distinction  is  taken  between 
ignorance  and  mistake  of  law.  They  seem  to  be  held  as  equivalent  terms, 
and  the  right  to  relief  is  denied  in  either  instance.  Others  of  them  draw 
a  distinction,  as  did  this  court  in  Culbreath  v.  Culbreath,*  and  maintain 
the  right  to  relief  where  there  has  been  a  mistake  of  law.  In  the  case 
under  consideration  the  plaintiffs  were  paying  the  money  sued  for  during 
the  years  1868  to  1872,  inclusive.  They  now  set  up  that  the  defendant 
had  no  right  by  law  to  make  the  charges  which  they  paid  ;  in  other  words, 
that  the  defendant  charged  and  they  paid  more  than  the  defendant  was, 
by  its  charter,  allowed  to  charge.  Why,  then,  did  they  pay  it  ]  If  volun- 
tarily, or  by  agreement,  knowing  the  law,  no  one  can  say  they  are  entitled 
to  recover  it  back.  If  voluntarily,  but  in  ignorance  of  the  law,  we  have 
seen  that  it  is  not  sufficient,  neither  under  the  principles  contained  in  the 
Code  or  under  the  decisions  referred  to.  If  there  was  any  fraud,  artifice, 
or  deception  practised  by  defendant,  it  should  have  been  shown.  Under 
this  great  weight  of  authority,  both  statutory  and  judicial,  it  may  well  be 
said,  as  was  said  by  the  judges  pronouncing  the  opinion  of  the  Supreme 
Court  of  New  York,  in  Clarke  v.  Dutcher  :  "  Although  there  are  a  few 
dicta  of  eminent  judges  to  the  contrary,  I  consider  the  current  and  weight 

1  Bate.  Com.  L.  26.  «  1  Story  E(\.  Jur.  §  140. 

8  12  East,  38  ;  2  East,  469  ;  5  Taunt.  144  ;  8  Wheat.  215  ;  2  Johns.  51  ;  9  Cow.  674  ; 
1  Wend.  355  ;  10  Pet.  138. 
*  7  Ga.  64. 


SECT.  I.]      AENOLD    &    DUBOSE   V.    GEO.    RR.    AND   BANKING  CO.  167 

of  authorities  as  clearly  establishing  the  position,  that  where  money  is  paid 
with  a  full  knowledge  of  all  the  facts  and  circumstances  upon  which  it  is 
demanded,  or  with  the  means  of  such  knowledge,  it  cannot  be  recovered 
back  upon  the  ground  that  the  party  supposed  he  was  bound  in  law  to  pay 
it,  when  in  truth  he  was  not.  He  shall  not  be  permitted  to  allege  his 
ignorance  of  the  law;  and  it  shall  be  considered  a  voltmtary  payment  :"* 
This,  then,  being  the  law  of  this  case,  although  the  court  below  erred 
on  the  question  of  jurisdiction,  we  are  constrained  to  affirm  the  gcnenil 
judgment,  as  the  verdict  must  necessarily,  under  the  evidence,  have  been 
what  it  was,  and  this  is  in  accordance  with  numerous  decisions  of  this 
court.  ^ 

Judgment  affirmed. 


HEMPHILL  V.   MOODY. 
In  the  Supreme  Court  of  Alabama,  December  Term,  1879. 

[Reported  in  64  Alabama  Reports,  468.] 

Appeal  from  the  Chancery  Court  of  Tuskaloosa. 

Heard  before  the  Hon.  Charles  Turner. 

The  bill  in  this  case  was  filed  on  the  24th  May,  1879,  by  Frank  S. 
Moody,  as  the  administrator  de  bonis  non  with  the  will  annexed  of  the 
estate  of  Edward  Sims,  deceased,  against  Felix  F.  Hemphill  and  his  wife, 
Mary  J.,  who  was  a  daughter  of  said  Sims  ;  and  against  the  personal  rep- 
resentative and  distributees  of  the  estate  of  Jerusha  Ready,  deceased,  who 
■was  also  a  daughter  of  said  Sims,  and  the  wife  of  Aaron  Ready,  deceased  ; 
and  against  several  other  persons,  not  necessary  to  be  named,  who  were 
legatees  under  the  will  of  said  Sims  and  distributees  of  his  estate.  It 
sought  to  remove  the  settlement  of  the  estate  of  Sims,  from  the  Probate 
Court  of  Tuskaloosa,  in  which  it  had  been  begun,  into  the  Chancery  Court ; 
to  establish  an  equitable  set-ofF  against  the  distributees  of  the  estate  of 
Jerusha  Ready,  on  account  of  the  payment  of  $2000,  which  the  complain- 
ant had  wrongfully  made  to  the  personal  representative  of  her  husband, 
said  Aaron  Ready,  and  of  which,  as  the  bill  alleged,  said  distributees  had 
received  the  benefit  on  the  settlement  and  distribution  of  his  estate;  and 
to  enforce  an  equitable  estoppel  against  said  ITemi)hill  and  wife,  in  regard 
to  this  wrongful  payment,  on  the  ground  that  Hemphill  had  agreed  and 
assented  to  said  payment  at  the  time  it  was  made.  Tlie  testator,  Sims, 
died  in  Tuskaloosa,  where  he  resided,  in  1838  ;  and  his  last  will  and  testa- 
ment was  there  duly  admitted  to  probate.  By  said  will,  a  copy  of  which 
was  made  an  exhibit  to  the  bill,  the  testator  devised  and  bequcnthcd  to 
liis  wife,  during  her  life  or  widowhood,  certain  lauds  with  slaves  and  other 
1  9  Cow.  681.  2  41  Gn.  16  ;  42  Gn.  244. 


168  HEMPHILL   V.   MOODY.  [CHAP.  H. 

property,  adding,  "But,  if  she  should  many,  or  die,  then,  and  in  that  case, 
it  is  my  will  that  all  the  property  I  have  left  her  should  be  sold,  ou  one, 
two,  and  three  years'  credit,  with  interest  after  one  year,  except  the  ne- 
groes," etc.  He  also  devised  other  lands  to  his  several  children,  and 
added  a  residuary  clause  in  these  words :  "  The  balance  of  my  property, 
which  is  not  given  away  in  this  will,  I  wish  sold  to  the  highest  bidder,  on  a 
credit  of  one,  two,  three,  four,  five,  or  six  years,  with  interest  from  day  of 
sale  ;  the  purchaser  giving  bond  and  good  securities,  and  not  to  have  titles 
to  lands  nor  lots  till  all  the  purchase-money  is  paid,  and  then  to  be  equally 
divided  between  my  above-named  children."  The  part  of  the  will  contain- 
ing the  foregoing  provisions  was  dated  February  2,  1838;  but  another 
part  was  added,  dated  February  5,  1838,  as  follows:  "Being  still  in  my 
proper  senses,  and  on  a  further  consideration  of  all  the  matters  and  things, 
I  have  thought  proper  to  alter  a  part  of  the  first  part  of  my  will :  that  is, 
in  case  my  beloved  wife  never  marries,  I  wish  for  her  to  have  $5000 
worth  of  property  left  her,  her  lifetime  or  widowhood,  she  having 
the  choice  of  it,  to  be  hers  forever,  to  do  as  she  may  think  proper  with  ; 
and  further,  by  Mr.  Aaron  Ready  putting  in  what  I  have  given  him  hereto- 
fore, and  his  having  rendered  services  which  the  others  could  not  do,  I  give 
him,  extra,  $2000.  Now,  in  explanation  of  this  will,  as  it  is  done 
just  on  my  starting  to  New  York,  and  in  a  hurry,  my  will  is,  that  the 
$5000  may  be  taken  out  of  what  I  give  my  beloved  wife,  and  the 
$2000  extra  which  I  give  Aaron  Ready  ;  the  balance  of  my  property, 
money,  and  everything,  I  leave,  to  be  equally  divided  among  my  chil- 
dren," etc. 

It  appears  that  Aaron  Ready  first  administered  on  the  testator's  estate, 
and  that  Mrs.  Sims,  the  widow,  survived  xmtil  1874;  but  neither  of  these 
facts  is  stated  in  the  bill.  Letters  of  administration  de  bonis  non,  on  said 
testator's  estate,  were  granted  to  the  complainant  on  the  9th  November, 
1874;  and  the  lands  which  wore  devised  to  the  widow  for  life,  and  di- 
rected to  be  sold  on  her  death,  having  been  sold,  as  directed,  and  the  pur- 
chase-money received  by  the  said  administrator,  he  paid  $2000,  a  part  of 
said  sum  of  money,  on  the  20th  May,  1876,  to  E.  A.  Graham,  as  the  ad- 
ministrator of  the  estate  of  Aaron  Ready,  in  satisfaction  of  the  said 
legacy  of  $2000,  which  was  supposed  to  be  due  and  unpaid.  On  final 
settlement  of  the  complainant's  accounts  as  administrator,  in  the  Probate 
Court  of  Tuskaloosa,  in  April,  1877,  he  claimed  a  credit  for  this  payment, 
and  it  was  allowed  by  the  Probate  Court,  against  the  objections  of  said 
Hemphill  and  wife,  who  duly  excepted  to  the  ruling  and  decision  of  the 
court,  and  brought  the  case  to  this  court  by  appeal ;  and  this  court  re- 
versed the  decree  of  the  Probate  Court,  and  remanded  the  cause,  as  shown 
by  the  report  of  the  case.  Hemphill  v.  Moody.^  The  complainant  there- 
upon filed  his  bill  in  this  case,  asking  a  removal  of  the  settlement  into  the 

»  62  Ala.  510. 


SECT.  I.]  HEMPHILL   V.   MOODY.  169 

Chancery  Court,  and  seeking  to  get  the  benefit  of  this  payment,  on  his 
final  settlement,  as  against  Hemphill  and  wife,  and  also  against  the  chil- 
dren of  Jerusha  Ready,  the  wife  of  said  Aaron  Ready,  who  were  alleged  to 
be  the  distributees  of  her  estate,  and  also  the  distributees  of  said  Aaron 
lieady's  estate.  In  reference  to  this  payment  to  Ready,  the  bill,  as 
amended,  contained  the  following  allegations:  "Tiiat  the  said  sum  of 
$2000  was  paid  by  him,  in  discharge  of  said  legacy  to  Aaron  Read}',  under 
a  mistake  of  law  and  fact,  in  this :  that  the  will  of  said  Sims  had  been  in- 
terpreted for  the  legatees  therein  named,  by  John  J.  Ormond,  a  mau 
learned  in  the  law,  and  formerly  one  of  the  justices  of  the  Supreme  Court 
of  Alabama,  who  gave  it  as  his  opinion,  as  yuur  orator  is  informed  and  be- 
lieves, and  so  states,  that  said  legacy  was  not  payable  until  after  the  death 
of  said  testator's  widow ;  and  that  this  opinion  was  accepted  and  acted 
upon  by  the  legatees  aforesaid  ;  and  furthermore,  that  said  payment  was 
made  by  your  orator  under  the  belief  and  supposition  that  the  interpreta- 
tion put  upon  said  will  by  said  Ormond  was  a  proper  construction  of  said 
■will,  and  had  been  accepted  and  concurred  in  by  all  the  legatees  under  said 
will,  and  especially  by  said  Ready  and  said  Hemphill,  and  under  the  be- 
lief that  said  legatee  had  never  been  paid  ;  and  furthermore,  that  when 
said  legacy  was  paid  by  complainant,  and  previous  thereto,  he  was  informed 
and  believed  that  his  predecessors  in  the  administration  of  said  estate,  and 
the  legatees  under  said  will,  and  the  original  executors  of  said  will,  unin- 
terruptedly admitted  that  said  legacy  had  never  been  paid,  and  concurred 
in  the  desire  that  the  same  should  be  recognized  and  paid,  as  a  valid  and 
existing  legacy  under  the  will  of  said  Sims."  The  bill  alleged  that  Hemp- 
hill and  his  wife  were  man-ied  in  1846,  and  the  complainant  insisted  that 
they  were  concluded  by  the  payment,  and  ought  not  to  be  allowed  to 
charge  him  with  a  devastavit  on  account  of  it,  because  Hemphill  had  as- 
sented to  the  payment  at  the  time  it  was  made,  and  had  acquiesced  in  the 
construction  placed  on  tlie  will.  As  to  the  distributees  of  Jerusha  Ready's 
estate,  it  was  alleged  that  they  were  also  the  distributees  of  the  estate  of 
Aaron  Ready,  and  had  received  from  his  administrator  the  $2000  paid  to 
him  by  the  complainant,  less  the  expenses  of  administration  ;  that  they 
were  insolvent ;  tliat  Aaron  and  Jerusha  Ready  had  both  been  dead  many 
years,  and  their  estates  had  been  finally  settled  and  distributed ;  that  let- 
ters of  administration  on  the  estate  of  the  former  had  been  granted  to 
Graham,  for  the  sole  purpose  of  enabling  him  to  collect  and  distribute  tiio 
said  .?2000 ;  that  the  estate  of  Jerusha  owed  no  debts,  and  lettei-s  of  ad- 
ministration on  it  had  V)cen  granted  to  one  of  the  defundants,  only  for  tho 
purpose  of  coercing  payment  a  second  time  of  their  distributive  portion  of 
said  sum  of  $2000,  which  was  alleged  to  be  less  tluin  they  had  rcciived 
from  Graham.  As  to  tlicse  distributees,  on  these  facts,  tho  complainant 
asked  that  he  be  allowed  to  retain  as  an  equitable  set-off,  out  of  their  pro- 
portiouate  share  of  said  $2000,  and  out   of  other  moneys  in  his  hands 


170  HEMPHILL   V.   MOODY.  [CHAP.  IL 

decreed  to  them  on  the  former  settlement,  so  much  as  they  had  received 
from  Graham  out  of  the  money  paid  to  him  by  the  complainant. 

Hemphill  and  wife  answered  the  bill,  and  incorporated  in  their  answer  a 
demurrer  for  want  of  equity,  specially  assigning  the  following  (with  other) 
causes  of  demurrer  :  1st,  that  the  complainant  was  concluded  by  the  de- 
cree of  the  Probate  Court;  2d,  that  he  made  the  payment  in  his  own 
wrong,  and  could  have  no  relief  against  it,  either  at  law,  or  in  equity  ;  3d, 
that  the  facts  stated  did  not  establish  an  equitable  estoppel  ;  4th,  that  the 
bill  showed  no  sufficient  reason  for  removing  the  settlement  into  the  Chan- 
cery Court ;  5th,  that  the  facts  alleged  did  not  show  any  right  to  an  equi- 
table set-off;  6th,  that  the  complainant's  remedy,  if  he  had  any  at  all,  was 
by  action  at  law  against  the  administrator  of  Aaron  Ready's  estate.  The 
administrator  and  children  of  Jerusha  Ready  also  answered,  and  demurred 
to  the  bill,  assigning  specially  the  same  causes  of  demurrer.  The  Chan- 
cellor overruled  the  demurrer  on  these  grounds,  and  held  that  the  bill  con- 
tained equity.  The  appeal  is  sued  out  in  the  name  of  Hemphill  and  wife 
et  al.,  and  the  overruling  of  their  demun-er  to  the  bill  is  assigned  as  error. 

A.  C.  Hargrove,  for  appellants. 

/.  M.  Martin^  and  U.  M.  Somerville,  for  appellee. 

Stone,  J.^  It  is  a  maxim,  born  of  necessity,  that  all  men  are  conclu- 
sively presumed  to  know  the  law.  Without  this,  legal  accountability  could 
Dot  be  enforced,  and  judicial  administration  would  be  embarrassed  at  every 
step.  The  necessity  of  this  rule  is  more  felt  and  acknowledged  in  criminal 
accountability,  than  in  mere  civil  obligations.  As  a  corollary,  there  has 
grown  up  another  maxim,  that  courts  will  not  reform  or  redress  those  acts 
of  parties,  which  are  the  result  of  pure  mistake  of  law.  Jones  v.  Watkins  ;^ 
Trustees  v.  Keller;^  Haden  v.  Ware;*  Dill  v.  Shahan  ;®  Town  Council  of 
Cahaba  v.  Burnett ;  ^  Lesslie  v.  Richardson.''  But,  in  civil  proceedings,  this 
rule,  owing  to  its  hardship,  has  been  treated  as  one  stridi  juris ;  and  if 
there  was  intermixed  with  the  mistake  of  law  any  mistake  of  fact,  courts 
have  willingly  seized  upon  it,  and  made  it  the  ground  of  relief.  There  is  a 
class  of  cases,  hard  to  distinguish  from  mistakes  of  law,  where,  through 
mistake,  a  written  agreement  contains  substantially  more  or  less  than  the 
parties  intended,  or  where,  from  ignorance  or  want  of  skill  in  the  draughts- 
man, the  object  and  intention  of  the  parties,  as  contemplated  by  the  agree- 
ment, is  not  expressed  in  the  written  instrument,  by  reason  of  the  use  of 
inapt  expressions ;  in  which  the  Court  of  Chancery,  on  clear  and  satisfac- 
tory proof  of  the  mistake,  will  reform  such  agreement,  and  make  it  conform 
to  the  true  intention  of  the  contracting  parties.*  The  principle  on  which 
courts  relieve,  in  cases  falling  within  this  class,  is  tliat  through  ignorance 

^  Only  so  much  of  the  opinion  is  given  as  relates  to  the  second  cause  of  demurrer.  —  Ed. 

2  1  Stew.  81.  8  1  Ala.  406.  *  15  Ala.  149. 

5  25  Ala.  694.  ^  34  Ala.  400.  ^  60  Ala.  563. 

8  1  Brick.  Dig.  681,  §§  606,  610. 


SECT.  I.]  HEMPHILL   V.   MOODY.  171 

or  misapprehension  of  the  legal  effect  of  the  terras  agreed  upon,  the  parties 
have  made  a  contract  variant  in  legal  construction  from  the  one  intended. 
Trapp  V.  Moore  ;^  Larkius  v.  Biddle.-  We  refer  to  this  class  of  cases,  not 
because  they  shed  any  direct  light  on  the  case  in  hand,  but  because  they 
show  that  courts  seize  upon  small  circumstances,  to  relieve  parties  of  a 
hard,  though  necessary  rule.  And  there  are  other  cases  in  which  tliis 
rule  is  relaxed.     Hardigree  v.  Mitchum.^ 

In  the  present  case,  ALoody,  the  administrator  of  Sims,  paid  to  the  ad- 
ministrator of  Aaron  Ready  $2000,  the  sum  of  a  pecuniary  le"acy  be- 
queathed by  the  will  of  Sims.  In  the  case  of  Hemphill  v.  Moody,  we  held 
this  payment  was  unauthorized,  and  that  Moody  was  not  entitled  to  a 
credit  for  it  in  his  settlement  as  administrator  of  Sims.  One  pui-pose  of 
the  present  bill  is  to  have  that  payment  applied  to  the  extinguishment  of 
the  distributive  interest  of  Aaron  Ready's  children  in  said  estate.  The 
averments  of  the  bill  are,  that  the  children  of  Aaron  Ready  and  the  chil- 
dren of  Jerusha  Ready,  his  wife,  daughter  and  legatee  of  testator  Sims,  are 
the  same  ;  that  they  ai-e  insolvent ;  that  the  $2000  paid  by  mistake  to 
Aaron  Ready's  administrator,  were  distributed  and  paid,  less  expenses  of 
administration,  to  said  children  of  Aaron  and  Jerusha  Ready  ;  that  in  this 
way  they,  the  children — distributees  alike  of  Aaron  and  Jerusha  Ready  — 
have  received  of  the  moneys  of  complainant  more  than  their  share  of  the 
undistributed  assets  of  the  estate  of  testator  Sims,  and  that  it  is  contrary 
to  equity  and  good  conscience  that  they  should  again  receive  payment  out 
of  the  private  purse  of  complainant  Moody.  The  answer,  if  we  were  allowed 
to  look  to  it,  denies  that  the  children  of  Aaron  Ready  and  the  children  of 
Jerusha  Ready,  are  entirely  the  same;  sets  up,  that  after  the  death  of 
Jerusha  Ready,  Aaron  married  a  second  time,  and  left  issue  by  the  second 
marriage,  who  shared  in  the  distribution  of  the  $2000  paid  to  Ready's 
administrator.  In  the  present  state  of  the  record,  and  on  the  present  ap- 
peal, we  cannot  know  or  inquire  how  this  question  stands.  Only  the  aver- 
ments of  the  bill  are  before  us.  Taking  those  averments  as  a  guide,  the 
share  of  the  undistributed  assets  of  testator's  estate  to  which  Mrs.  Ready's 
administratrix  is  entitled,  is  $1100  or  $1200.  There  is  no  averment  in 
the  bill  showing  the  amount  of  the  $2000  distributed  and  jtaid  to  the 
distributees  of  Aaron  Ready,  which  went  to  tlie  distributees  of  Jerusha 
Ready.  Guided,  however,  by  the  bill,  the  stun  distributed  and  paid  to 
tl)em  exceeds  the  distributive  share  of  Jerusha  Ready's  estate  in  the  undis- 
tributed assets.  The  bill  avers  that  Jerusha  Ready  died  many  years  ago  ; 
that  her  estate  owes  no  debts,  and  that  the  only  function  and  duty  her 
administratrix  will  be  required  to  perform,  is  the  distriliution  of  her  intes- 
tate's distributive  share  among  her  distributees,  next  of  kin. 

We  do  not   think   this   case,  so   far  as   it   seeks   relief  against  Jerusha 
Ready's  distributees,  stands  on  the  naked  princijde  of  a  suit  to  recover  back 
1  21  Ala.  C93.  «  21  Ala.  252.  ^  51  Ala.  LOl. 


172  WEBB   V.   THE   CITY   COUNCIL   OF   ALEXANDEIA.  [CHAP.  II. 

money  paid  under  a  mistake  of  law.  The  bill  makes  no  effort  to  recover 
the  money  back.  Its  object  is,  to  have  a  payment,  actually  made,  applied 
in  extinguishment  or  reduction  of  a  debt  or  liability  actually  due  and  ow- 
in-J-.  Guided,  as  we  have  said,  by  the  averments  of  the  bill.  Moody,  the 
complainant,  was  liable  to  pay  —  was  indebted — to  Jerusha  Ready's  estate, 
to  be  distributed  and  paid  to  her  next  of  kin,  $1100  or  $1200;  no  more. 
He  lias  paid,  and  they  have  received  a  larger  sum  than  that,  to  which  they 
had  no  other  rightful  claim.  They  cannot  demand  a  second  payment,  on 
the  technical  gro\md  that,  when  the  payment  was  made,  it  was  erroneously 
supposed  to  be  due  on  another  account.  Payment  discharges  a  debt,  no 
matter  when,  or  by  whom  made. 

The  decree  of  the  Chancellor  is  reversed,  and  a  decree  here  rendered,  sus- 
taining the  demurrer  to  every  feature  of  the  bill,  except  that  which  seeks  re- 
lief against  the  personal  representative  and  distributees  of  Jerusha  Heady  ; 
and  to  that  extent,  the  bill  is  retained.  The  injunction  against  proceeding 
with  the  settlement  in  the  Probate  Court  is  dissolved.  Let  the  costs  of 
appeal  in  this  court,  and  in  the  court  below,  be  paid  by  the  appellee. 


WEBB   V.   CITY  COUNCIL  OF  ALEXANDRIA. 

In  the  Supreme  Court  of  Appeals  of  Virginia,  April  15,  1880. 

[Reported  in  33  Grattan,  168.] 

This  was  a  suit  in  equity  in  the  corporation  court  of  Norfolk,  brought 
by  the  City  Council  of  Alexandria  against  Lewis  W.  Webb,  to  compel  the 
said  Webb  to  return  to  the  plaintiff  four  bonds,  each  for  $500,  which  had 
been  issued  by  the  plaintiff  to  Webb.  There  was  a  decree  in  favor  of  the 
plaintiff,  and  Webb  obtained  an  appeal  to  this  court.  The  case  is  fully 
stated  in  the  opinion  of  the  court  delivered  by  Judge  Christian. 

Judge  Burronglis  for  the  appellant. 

Charles  E.  Stuart  for  the  appellee. 

Christian,  J.,  delivered  the  opinion  of  the  court. 

This  case  is  before  us  on  appeal  from  a  decree  of  the  corporation  court 
of  the  city  of  Norfolk.  The  case  is  a  sequel  to  the  suit  of  Fairfax  against 
the  City  Council  of  Alexandria,  reported  in  28  Gratt.  16. 

The  facts  disclosed  by  the  record,  so  far  as  they  are  necessary  to  be 
noticed  in  this  opinion,  are  as  follows :  Dr.  Orlando  Fairfax  was  the  owner, 
prior  to  the  4th  day  of  May,  1864,  of  certain  registered  bonds,  or  certifi- 
cates of  stock,  issued  by  the  city  of  Alexandria  for  the  sum  of  $8700. 

On  the  4th  day  of  May,  1864,  by  a  decree  of  the  district  court  of  the 
United  States  for  the  eastern  district  of  Virginia,  this  stock  or  debt  was 
confiscated  and  condemned,  and  a  writ  venditioni  exponas  was  awarded  by 


SECT.  I.]  WEBB   V.    CITY   COUNCIL   OF   ALEXANDRIA.  1 


to 


said  court.  At  tlie  sale  made  under  that  writ,  the  appellant  became  the 
purchaser  of  $2000  of  said  stock,  and  on  the  1st  day  of  August,  ISG-t,  at 
his  request,  the  United  States  marshal  made  a  transfer  of  the  same  on  the 
books  of  the  appellee  ;  and,  thereupon,  also  at  his  request,  two  certificates 
of  stock,  of  $1000  each,  were  issued  to  the  appellant. 

By  an  act  of  the  general  assembly,  approved  February  U,  1872  (see 
Acts  of  1871-72,  p.  73),  the  city  of  Alexandria  was  authorized  to  call  in  all 
the  evidences  of  indebtedness  of  said  city  in  the  form  of  stocks,  bonds,  and 
certificates  theretofore  issued,  and  to  issue  in  their  place  a  like  amount  of 
registered  coupon  bonds,  bearing  six  per  cent  interest,  payable  semi- 
annually, the  bonds  payable  thirty  years  after  date,  the  coupons  of  which 
were  declared  to  be  receivable  in  payment  of  the  city  taxes  and  of  any 
other  indebtedness  due  to  the  said  city. 

When  the  certificates  of  stock,  transferred  to  the  appellant  by  order  of 
the  United  States  marshal  under  the  proceedings  of  the  confiscation  sale  in 
1864,  became  due,  he  by  letter  and  in  person  demanded  their  payment, 
and  threatcTied  suit  thereon  unless  payment  was  made. 

He  did  not,  however,  institute  his  suit,  but  accepted  from  the  City  Coun- 
cil of  Alexandria,  in  lieu  of  said  certificates  of  stock  for  §2000,  four  coupon 
bonds  for  the  sum  of  $500  each,  issued  under  the  aforesaid  act,  bearing 
date  1st  of  July,  1872,  and  payable  thirty  years  after  date. 

At  the  time  of  the  confiscation  proceedings  in  the  district  court  of  the 
United  States,  the  certificates  of  stock  owned  by  Orlando  Fairfox  were  in 
his  possession,  and  in  Februar}',  1874,  all  of  them  having  previously  fallen 
due,  he  commenced  suit  thereon  against  the  city  of  Alexandria.  The  cir- 
cuit court  of  said  city  gave  a  judgment  against  Fairfax  and  in  favor  of  the 
said  city.  On  a  writ  of  error  to  that  judgment  this  court  reversed  the 
same,  and  rendered  a  judgment  against  said  city  of  Alexandria  and  in  favor 
of  said  Fairfax  for  the  sum  of  $8700  with  interest  and  cost. 

The  case  was  then  carried  by  writ  of  error  to  the  Supreme  Court  of  the 
United  States,  where  the  decision  of  this  court  was  aflSrmed. 

It  is  further  shown  by  the  record  that  immediately  after  the  rendition  of 
the  judgment  of  this  court  the  City  Council  of  Alexandria  directed  its  ofliccrs 
not  to  transfer  any  bond  held  by  the  appellant,  nor  to  pay  nor  receive  any 
of  the  interest  coupons  detached  therefrom.  And  a  few  days  after  the  de- 
cision of  the  Supreme  Court  of  the  United  States  affirming  the  judgment  of 
this  court,  the  City  Coimcil  of  Alexandria  filed  their  bill  praying  that  the 
bonds  and  coupons  held  by  the  appellant  and  whicli  represented  the  stock 
purchased  by  him  at  the  "  confiscation  sale  of  Fairfax's  property,"  might  be 
delivered  up  for  cancellation;  and  that  the  interest  on  said  stock  and  bonds 
paid  by  the  appellee  to  the  appellant  might  be  decreed  to  be  paid  back  ; 
and  that  the  defend.ant  might  be  restrained  by  injiinction  from  selling, 
hypothecating,  or  otherwise  disposing  of  the  bonds  Nos.  209,  210,  21 1,  and 
212,  or  the  coupons  annexed  thereto,  or  detached  therefrom,  these  being 


174  WEBB   V.   CITY   COUNCIL   OF  ALEXANDRIA.  [CHAP.  II. 

the  coupon  bonds  issued  to  the  appellant  in  lieu  of  the  certificates  of  stock 
purchased  by  him  at  the  confiscation  sale. 

This  bill  was  presented  to  the  judge  of  the  corporation  court  of  the  city 
of  Norfolk,  who  awarded  an  injunction  in  accordance  with  the  prayer  of 
the  bill. 

Upon  the  hearing,  the  injunction  was  perpetuated,  and  a  decree  was 
entered  ordering  the  bonds  and  coupons  in  the  hands  of  the  appellant  to  be 
delivered  up  and  cancelled,  and  directing  that  the  appellant  pay  to  the 
appellee  the  sum  of  $540,  with  interest  from  the  date  of  the  institution  of 
the  suit,  and  costs. 

From  this  decree  an  appeal  was  allowed  by  one  of  the  judges  of  this 
court. 

The  court  is  of  opinion  there  is  no  error  in  the  decree  of  the  said  corpor- 
ation court. 

First.  It  has  been  definitely  declared  and  established  both  by  this  court 
and  the  Supreme  Court  of  the  United  States,  that  the  decree  of  confisca- 
tion entered  by  the  district  court  of  the  United  States,  against  Orlando 
Fairfax,  directing  a  sale  of  the  certificates  of  stock  issued  to  him  by  the 
city  of  Alexandria,  was  a  mere  nullity  and  absolutely  void. 

This  court  based  its  judgment  on  two  grounds  :  Fi7'st,  that  the  district 
court  had  no  jurisdiction  of  the  case,  for  the  reason  that  there  was  no 
proper  seizure  of  the  stock  ;  and  second,  that  by  reason  t)f  a  rule  of  that 
court  denying  to  "traitors"  and  "rebels"  (so-called  by  said  court)  the  right 
to  appear  and  make  defence  in  such  cases,  Orlando  Fairfax  was  in  eff'ect 
not  a  party  to  tlie  proceedings. 

The  Supreme  Court  of  the  United  States  based  its  judgment  solely  upon 
the  ground  that  there  was  no  proper  seizure  of  the  stock,  because  the  pro- 
cess was  not  served  upon  a  proper  officer  of  the  corporation,  as  required  by 
the  statute  law  of  Virginia.  But  it  was  adjudged  by  both  courts,  that  the 
confiscation  sale  was  a  mere  nullity,  and  that  the  purchaser  acquired  no 
title  by  his  purchase  at  said  sale. 

There  can  be  no  doubt  that  the  appellee  issued  and  the  appellant  ac- 
cepted the  two  certificates  of  $1000  each  under  the  erroneous  belief  that 
by  virtue  of  the  decree  of  confiscation,  the  debt  due  to  Orlando  Fairfax  had 
been  forfeited  and  his  title  thereto  extinguished,  and  that  the  appellant,  as 
purchaser,  under  the  writ  of  venditioni  exponas  issued  under  that  decree, 
had  become  the  rightful  owner  of  $2000  thereof. 

It  is  also  equally  free  from  doubt  that  the  coupon  bonds  were  given  and 
accepted  in  exchange  for  those  certificates  under  the  same  erroneous  convic- 
tion. In  point  of  fact,  the  coupon  bonds  were  issued  for  the  original  claim 
of  the  appellant.     There  was  no  new  contract  and  no  new  consideration. 

If  the  appellant  acquired  no  title  by  his  purchase  at  the  confiscation  sale, 
to  the  certificates  of  stock  sold  at  such  sale,  which  has  been  declared  by 
this  court  and  the  Supreme  Court  of  the  United  States  void,  he  could 


SECT.  I.]  WEBB   V.   CITY   COUNCIL   OF   ALEXANDRIA.  175 

acquire  no  better  title  by  accepting  without  any  new  or  further  considera- 
tion the  coupon  bonds  issued  for  the  same  indebtedness. 

When  the  four  coupon  bonds  of  $500  each  were  issued  to  the  appellant 
under  the  act  of  1872,  the  appellee  was  funding  its  whole  debt  of  nearly  a 
million  of  dollars  by  issuing  similar  bonds  to  all  its  creditore.  At  that 
time  there  was  no  controversy  between  the  appellant  and  appellee  as  to 
the  title  to  the  said  certificates  of  stock,  and  there  had  been  no  adjudication 
of  the  validity  of  the  confiscation  sale.  But  on  the  contrary,  the  corpora- 
tion found  on  its  books  tliis  stock  transferred  by  order  of  the  United  States 
marshal  to  the  appellant  at  his  request,  and  they  issued  to  him  as  the 
apparent  owner  on  their  books,  the  four  coupon  bonds  in  the  place  of  the 
two  certificates  of  stock.  The  corporation  did  not  know  and  could  not 
know  at  that  time  that  the  confiscation  sale  was  void.  It  was  only  years 
afterwards,  when  Orlando  Fairfax  brought  his  suit,  that  they  had  any  notice 
that  the  validity  of  that  sale  would  be  contested.  All  that  the  corporation 
knew  or  could  know  at  that  time,  was  the  fact  that  a  court  of  competent 
jurisdiction  had  decreed  a  sale  of  the  certificates  of  stock  due  to  Fairftxx, 
and  that  at  that  sale  the  appellant  had  become  the  purchaser,  and  that  at 
his  request  the  marshal  making  the  sale  had  had  the  stock  to  the  amount 
of  $2000  transferred  to  the  appellant.  It  was  not  for  the  corporation  to 
question  the  validity  of  that  sale.  Its  duty  was  to  direct  the  payment  of 
said  stock  to  the  real  owner,  and,  according  to  the  decree  of  the  district 
court  of  the  United  States,  the  appellant  was  the  owner.  To  him  they 
issued  the  four  coupon  bonds  in  place  of  the  stock  purchased  by  him.  It 
is  plain  that  the  issuance  of  said  bonds  created  no  new  liability.  Tliey  rep- 
resented the  same  debt  and  for  them  there  was  no  new  consideration.  It 
is  clear,  therefore,  that  if  the  appellant  had  no  title  to  the  stock  he  had 
none  to  the  coupon  bonds  issued  in  its  place. 

The  claim  of  the  appellant  is  based  upon  two  grounds  :  First,  that  the 
appellee  is  not  entitled  to  relief  in  a  court  of  equity,  because  it  is  estopped 
by  its  conduct  from  denying  the  defendant's  title  to  the  coupon  bonds  and 
the  coupons  due  thereon ;  and  second,  because  if  the  said  certificates  of 
stock  were  transferred  and  the  said  coupon  bonds  issued  in  their  place  were 
80  transferred  and  issued  by  mistake  as  to  the  rights  of  tlie  parties,  that 
mistake  is  one  of  law ;  and  in  equity  as  well  as  at  law  the  maxim  igno- 
raiitia  juris  neviinem  excusat  must  prevail.  We  will  briefly  notice  both  of 
these  objections.^ 

The  court  is  further  of  opinion  that  the  rule  invoked  by  the  appellant, 
ignorantia  juris  non  excusat,  does  not  apply  in  this  case. 

While  it  is  a  general  rule  that  mistake  in  matter  of  law  cannot  bo  ad- 
mitted as  groimd  of  relief,  it  is  not  a  rule  of  universal  application,  especially 
in  courts  of  equity.  It  is  not  an  absolute  and  inllexil)li;  rule,  l)nt  lias  its 
exceptions,  though  such  exceptions,  in  the  language  of  Judge  Stoky,  are 

*  Only  so  much  of  tlie  opinion  i.s  given  as  relates  to  the  second  ohjoction.  —  Kl). 


176  WEBB   V.   CITY   COUNCIL   OF   ALEXANDRIA.  [CHAP.  IL 

few,  and  generally  stand  upon  some  very  urgent  pressure  of  circumstances. 
If  the  maxim  is  used  in  the  sense  of  denoting  general  law,  the  ordinary  law 
of  the  country,  no  exception  can  be  admitted  to  its  general  application;  but 
it  is  otherwise  when  the  word  jtis  is  used  in  the  sense  of  denoting  a  private 
right.  If  a  man,  through  misapprehension  or  mistake  of  the  law,  parts 
with  or  gives  up  a  private  right  of  property,  or  assumes  obligations  upon 
grounds  upon  which  he  would  not  have  acted  but  for  such  misapprehension, 
a  court  of  equity  may  grant  relief,  if  under  the  general  circumstances  of  the 
case  it  is  satisfied  that  the  party  benefited  by  the  mistake  cannot  in  con- 
science retain  the  benefit  or  advantage  so  acquired. 

It  has  also  been  held  in  numerous  cases  that  where  the  law  is  confessedly 
doubtful  and  about  which  ignorance  may  well  be  supposed  to  exist,  a  per- 
son acting  under  a  misapprehension  of  the  law  will  not  forfeit  any  of  his 
legal  rights  by  reason  of  such  mistake.  See  Kerr  on  Fraud  and  Mistake, 
398-401,  and  cases  there  cited. 

Exceptions  to  the  general  rule  that  mistake  of  law  furnishes  no  ground 
of  relief  are  fully  recognized  by  this  court  in  the  cases  of  Zollmau  v. 
Moore ;  *  and  Brown  v.  Rice's  adm'r.* 

Now  it  is  to  be  remarked  that  the  appellant's  claim  was  based  upon  his 
purchase  at  a  confiscation  sale  made  under  an  act  of  Congress  which  was 
in  itself  a  war  measure,  and  not  an  ordinary  general  law,  but  was  an  extra- 
ordinary enactment  for  a  specific  purpose  and  amid  exigencies  arising  out 
of  civil  war. 

This  act  of  Congress,  at  the  time  of  the  transfer  of  stock  above  men- 
tioned and  the  substitution  of  the  coupon  bonds  in  their  place,  had  not 
been  construed  by  courts,  nor  the  mode  of  its  operation  and  execution 
determined. 

It  would  be  vain  to  say,  in  such  a  case,  that  the  City  Council  of  Alexan- 
dria knew,  or  ought  to  have  known,  how  such  a  law,  new  and  extraordinary 
in  its  nature,  would  be  construed  by  the  courts,  and  whether  seizure  and 
confiscation  under  it  would  be  declared  regular  and  valid,  or  irregular  and 
invalid,  according  to  the  mode  in  which  the  process  was  executed,  or  other 
proceedings  had  thereunder. 

But  was  the  mistake  here  a  mere  mistake  of  law  ?  It  is  true  the  district 
court  of  the  United  States  had  jurisdiction  under  the  confiscation  act,  and 
ot  this  no  one  can  be  presumed  to  be  ignorant.  But  in  the  case  of  confisca- 
tion of  Fairfax's  stock  the  jurisdiction  of  the  court  did  not  attach  because 
the  stock  was  not  properly  seized  by  the  marshal. 

The  mode  of  seizure  was  prescribed  by  the  attorney-general  to  the  dis- 
trict attorney ;  and  whilst  these  instructions  had  the  force  of  law,  they 
could  not  be  regarded  as  constituting  a  part  of  the  general  law  of  which 
every  man  is  presumed  to  be  cognizant.  And,  so  also,  it  may  be  said  that 
the  rule  adopted  by  the  district  court  of  the  United  States,  denying  to 
1  21  Gratt.  313.  *  26  Gratt.  467. 


SECT.  I.]  WEBB   V.   THE   CITY   COUNCIL   OF   ALEXANDRIA-  177 

rebels  and  traitors  the  right  to  appear  and  make  defence  in  confiscation 
suits,  so  far  from  being  a  part  of  the  general  law,  was  against  law  and  void. 
So  that  the  two  grounds  upon  which  this  court  and  the  Supreme  Court  of 
the  United  States  based  their  decisions  in  declaring  the  confiscation  sale  to 
be  void  were  founded  upon  questions  of  fact  as  well  as  questions  of  law. 

It  cannot,  therefore,  be  said  that  the  appellee  is  seeking  relief  upon  the 
ground  of  mistake  in  law.  Rut  apart  from  all  this  the  peculiar  circum- 
stances of  this  case,  taken  in  connection  with  the  proceedings  in  the  confis- 
cation case  above  referred  to,  and  the  decisions  of  both  this  court  and  of  the 
Supreme  Court  of  the  United  States  in  reference  to  the  same,  it  is  a  case 
strongly  appealing  to  a  court  of  equity  for  relief. 

The  rule  laid  down  by  Mr.  Kerr,  and  for  which  he  cites  numerous  author- 
ities, that  "  If  a  man  through  misapprehension  or  mistake  of  law  parts  with 
or  gives  up  a  private  right  of  property,  or  assumes  obligations  upon  grounds 
upon  which  he  would  not  have  acted  but  for  such  misapprehension,  a  court 
of  equity  may  grant  relief,  if,  under  the  general  circumstances  of  the  case, 
it  is  satisfied  that  the  party  benefited  by  the  mistake  cannot  in  conscience 
retain  the  benefit  or  advantage  so  acquired,"  has  peculiar  application  to 
this  case. 

Under  the  decision  of  this  court  affirmed  by  the  Supreme  Court  of  the 
United  States,  the  City  Council  of  Alexandria  is  compelled  to  pay  over  to 
Orlando  Fairfax  the  sum  of  $8700,  the  stock  issued  to  him,  and  if  the 
claim  of  the  appellant  be  allowed,  the  appellee  must  pay  him  also  the  sum 
of  $2000  of  the  same  stock  which  he  acquired  by  purchase  at  a  sale 
declared  to  be  utterly  void.  And  it  also  appears  by  this  record  that  for 
this  stock  thus  purchased  he  paid  only  the  sum  of  $400,  upon  which  he  has 
received  in  the  shape  of  interest  the  sum  of  $1G99.60.  To  liold  the  city 
of  Alexandria  responsible  under  such  circumstances  would  be  grossly 
inequitable  and  unjust. 

We  think  it  is  plain  upon  the  whole  case,  that  the  appellee  is  entitled  in 
equity  to  the  relief  prayed  for.  And  of  this  the  appellant  has  no  just  cause 
for  complaint,  but  on  the  contrary  is  most  fortunate,  for  though  a  purchaser 
at  a  sale  declared  to  be  void,  he  has  realized  a  large  sum  in  interest  and 
dividends,  which  amply  reimburse  him  for  the  outlay  of  money  which  he 
made. 

The  court  is  therefore  of  opinion  that  there  is  no  error  in  the  decree  of 
the  corporation  court  of  the  city  of  Norfolk,  and  that  the  same  must  bo 
affirmed. 

Decree  affirmed. 


12 


173  ROGERS   V.   WALSH    &    PUTNAM.  [CHAP.  II. 


SARAH    ROGERS,    Plaintiff    in    Error    v.    WALSH    &    PUTNAM, 
Defendants   in    Error. 

In  the  Supreme  Court  of  Nebraska,  November  Term,  1881. 

[Reported  in  12  Nebraska  Reports,  28.] 

Error  to  the  district  court  for  Lancaster  county.  Heard  there  before 
Pound,  J.,  ou  demurrer  to  the  petition.  Demurrer  sustained  and  cause 
dismissed. 

W.  J.  Lamb  for  plaintiff  in  error. 

Mason  &  Whedon,  for  defendants  in  error,  cited  Lambert  v.  Heath  ;  ^ 
Otis  V.  Culhim;^  Loan  Association  v.  Topeka;®  Charter  v.  Hopkins.*  Most 
of  the  cases  cited  by  the  plaintiff  relate  to  forged  paper.  They  rest  on  a 
different  principle  than  the  one  at' bar.  In  those  cases,  the  purchasers  did 
not  get  what  they  intended  to  buy,  and  did  buy.  They  got  forged  paper, 
and  not  true  and  genuine.  In  the  case  at  bar  the  plaintiff  in  error  got 
exactly  what  she  intended  to  buy  and  did  buy.  The  commissioners  record 
of  York  county,  in  respect  to  these  warrants,  was  open  for  her  inspection 
and  examination,  and  it  was  a  question  of  law  whether  these  warrants  were 
ultra  vires  and  not  of  fact,  and  it  is  too  well  established  that  money  paid 
under  a  mistake  of  law  cannot  be  recovered  back,  to  need  citation  of  au- 
thorities in  this  court  for  its  support.  Here  was  no  bad  faith,  no  liability 
ex  delicto,  no  claim  or  pretence  of  that  kind.  And  here  is  a  full  performance 
of  everything  that  the  law  implies  ex  contractu,  that  the  warrants  belonged 
to  the  defendants  in  error,  that  they  were  not  forgeries.  It  is  admitted 
that  the  warrants  sold  were  not  forgeries ;  it  is  admitted  that  they  belonged 
to  Walsh  &  Putnam,  that  there  was  no  warranty  or  guaranty.  There  was 
no  express  stipulation,  there  was  no  liability  beyond  the  implied  guaranty 
that  Walsh  &  Putnam  were  the  owners  of  these  warrants,  and  where  there 
is  no  express  stipulation  there  is  no  liability. 

Lake,  J.  The  warrants  in  question,  having  been  issued  by  the  commis- 
sioners of  York  county  without  authority  of  law,  were  void.  We  have 
presented  to  us,  therefore,  the  single  question,  whether,  under  the  circum- 
stances of  their  sale,  they  were  a  good  consideration  for  the  money  which 
the  plaintiff  paid  for  them. 

It  is  averred  in  the  petition  that  at  the  time  of  this  purchase  and  the 
payment  of  the  money,  there  were  genuine  valid  county  warrants  in  the 
market  where  these  were  bought,  and  that  the  plaintiff  supposed  those  in 
question  to  be  such,  until  long  after  she  received  them.  Indeed,  from  the 
facts  alleged,  there  can  be  no  doubt  that  the  purchase  was  made  with  the 
full  belief  on  her  part,  and  probably  on  the  part  of  the  defendants,  that 
what  was  obtained  by  it  were  the  genuine  warrants  of  York  county.     Such 

1  15  M.  &  W.  486.         2  91  u.  s.  447.        ^  20  Wall.  665.         <  4  M.  &  W.  339. 


SECT.  I.]  ROGERS   V.    WALSH    &    PUTNAM,  179 

being  the  case,  but  for  the  seeming  confidence  of  the  defendants'  counsel 
in  the  strength  of  their  position,  we  would  not  suppose  a  doubt  could  have 
existed  that  there  was  an  entire  want  of  consideration  for  the  payment  of 
the  money,  and  that  the  plaintiff  was  entitled  to  a  return  of  the  price  paid 
for  what  had  proved  to  be  wholly  worthless. 

The  defence  here  made  rests  chiefly  upon  the  authority  of  two  cases 
cited,  one  English  and  the  other  American,  viz.  Lambert  v.  Heath,*  and 
Otis  V.  Cullum.^  But  the  facts  of  those  cases  were  so  different  in  character 
from  those  of  the  one  at  bar,  that  the  governing  principle  in  them  is  inap- 
plicable here.  In  those  cases  the  purchasers  actually  obtained  just  what 
they  had  contracted  to  buy,  and  the  decisions  were  put  upon  that  ground 
alone,  there  being  no  express  warranty.  Here,  however,  the  purchase  was 
of  the  warrants  of  York  county,  while  in  fact  what  were  received  as  such 
were  not  the  warrants  of  that  county  at  all,  but  only  things  in  their  simili- 
tude. Having  been  issued  by  the  commissioners  without  authority  of  law, 
they  can  no  more  be  considered  the  obligations  of  that  county,  than  if 
signed  by  any  other  of  her  citizens.  They  are  merely  valueless  pieces  of 
paper,  resembling  York  county  warrants,  nothing  more. 

The  principle  that  should  govern  here  was  applied  in  the  case  of  Young 
V.  Cole,  reported  in  32  Eng.  Com.  Law,  334,  and  cited  in  Benj.  on  Sales, 
Sec.  607.  The  sale  there  considered  was  of  certain  Guatemala  bonds, 
which,  because  unstamped,  had  been  repudiated  by  the  government  of  that 
state,  and  were  tlierefore  valueless,  of  which  facts  both  seller  and  purchaser 
were  at  the  time  ignorant,  and  it  was  held  that  the  defendant  should  restore 
the  price  he  had  received.  In  commenting  upon  the  facts  of  that  case 
TiNDAL,  C.  J.,  said,  that  the  contract  was  for  real  Gautomala  bonds,  and 
the  question  was  not  one  of  warranty,  but  whether  the  defendant  had  not 
delivered  something  which,  though  resembling  the  article  contracted  to  bo 
sold,  was  of  no  value. 

On  the  facts  alleged  in  the  petition  we  are  of  opinion  that  the  pretended 
warrants  were  not  a  valid  consideration  for  the  price  paid  therefor,  and  that 
the  plaintiff  should  recover.  The  judgment  is  therefore  reversed,  and  the 
cause  remanded  to  the  court  below  for  further  proceedings. 

Reversed  and  Remanded. 


WAPLES  V.  UNITED   STATES. 
In  the  Supreme  Court  of  the  United  State.s,  Marco  3,  1884. 

[Reported  in  110  United  States  Reports,  630.) 

Mr.  C.  W.  Ilnrnor  and  Mr.  Mason  Day  for  appellant. 

Mr.  Solicitor-G eneral  for  a})pellee  submitted  the  case  on  his  brief 

Mr.  Justice  Field  delivered  the  opinion  of  the  court. 

1  15  M.  &  W.  484.  »  91  U.  S.  447. 


180  WAPLES  V.   UNITED   STATES.  [CHAP.  IL 

In  March,  1865,  the  plaintiff  purchased  for  the  sum  of  $7400  certain 
real  property  in  New  Orleans  at  a  sale  upon  a  decree  rendered  by  the 
district  court  of  the  United  States  in  proceedings  for  its  confiscation 
under  the  Act  of  July  17,  1862,  and  subsequently  obtained  a  deed  of  the 
property  from  the  marshal.  The  proceedings  were  instituted  in  the  usual 
form  by  a  libel  of  information  filed  on  the  7th  of  August,  1862,  by  the 
district  attorney  of  the  Eastern  District  of  Louisiana  on  behalf  of  the 
United  States,  against  ten  lots  of  ground  alleged  to  be  the  property  of 
Charles  M.  Conrad.  The  libel  sets  forth  that  the  marshal  of  the  district, 
under  authority  from  the  district  attorney,  given  pursuant  to  instructions 
of  the  Attorney-General,  had  seized  the  lots  of  ground,  which  are  fully 
described,  as  forfeited  to  the  United  States ;  that  they  were  owned  by 
Conrad  then,  and  on  the  Nth  of  July,  1862,  and  previously;  that  after 
that  date  he  had  acted  as  an  officer  of  the  army  or  navy  of  the  rebels  in 
arms  against  the  government  of  the  United  States,  or  as  a  member  of  Con- 
gress, or  as  a  judge  of  a  court,  or  as  a  cabinet  officer,  or  as  a  foreign  minis- 
ter, or  as  a  commissioner,  or  as  a  consul  of  the  so-called  Confederate  States. 
Indeed,  many  other  official  positions  he  is  charged  in  the  alternative  with 
holding,  the  district  attorney  evidently  regarding  him  as  a  person  of  so 
much  consequence  that  he  must  have  been  called  to  some  official  position 
by  the  Confederate  government,  in  which  he  gave  aid  and  comfort  to  the 
enemies  of  the  United  States,  and  therefore  his  right,  title,  and  estate  in 
the  property  was  forfeited,  and  ought  to  be  condemned.  Publication  of 
monition  followed,  and  no  one  appearing  to  answer,  judgment  by  default 
was  entered,  declaring  that  the  lots  of  land,  the  property  of  Conrad,  wei'e 
condemned  as  forfeited  to  the  United  States,  and  a  decree  for  their  sale 
was  entei'ed.  In  the  writ  issued  to  the  marshal  and  in  his  deed  of  sale, 
the  lots  are  described  as  the  property  of  Conrad.  Under  the  Act  of  Con- 
gress no  other  interest  than  that  of  Conrad  was  forfeited,  and  no  other 
interest  was  sold.  It  was  for  his  alleged  offences  that  the  libel  was  filed 
and  the  forfeiture  sought.  It  was  midoubtedly  in  the  power  of  Congress 
to  provide  for  the  confiscation  of  the  entire  property  as  being  within  the 
enemy's  country,  without  restricting  it  to  the  estate  of  the  defendant,  but 
Congress  did  not  see  fit  to  so  enact ;  and,  as  we  said  in  speaking  of  the  pro- 
ceedings in  this  case  :  "  The  court  cannot  enlarge  the  operations  of  the 
stringent  provisions  of  the  statute.  The  plaintiff  had  notice  of  the  charac- 
ter and  legal  effect  of  the  decree  of  condemnation  when  he  purchased,  and 
is  therefore  presumed  to  have  known  that  if  the  alleged  offender  possessed 
no  estate  in  the  premises  at  the  time  of  their  seizure,  nothing  passed  to  the 
United  States  by  the  decree  or  to  him  by  his  purchase."  Burbank  v. 
Conrad.^ 

This  would  be  true  with  reference  to  any  layman  who  might  have  been 
the  purchaser,  but  with  special  force  may  it  be  applied  to  the  plaintiff,  who 

1  96  U.  S.  291. 


SECT.  l]  WAPLES    V.   UNITED  STATES.  ISl 

as  the  district  attorney  directed  the  seizure  and  conducted  the  proceedings 
to  the  decree. 

It  turned  out  in  other  litigation  tliat  at  the  time  of  the  seizure  Conrad 
possessed  no  estate  in  the  premises.  He  had  tninsforred  the  property  by  a 
public  act  of  sale  Wfore  a  notary,  on  the  31st  of  May,  18G2,  Ivfore  the  con- 
fiscation statute  was  passed,  which  applied  only  to  the  property  of  persons 
thereafter  guilty  of  acts  of  disloyalty  and  treason.  In  express  terms  it 
withheld  from  its  ap[)lication  the  property  of  persons  who  before  its  passage 
may  have  offended  in  those  respects.  Conrad's  power  of  disposition  when 
he  made  his  sale  to  his  sons  was  not  impaired  by  anything  he  may  previ- 
ously have  done.  This  was  expressly  adjudged  by  this  court  in  the  case  of 
Conrad,  the  son,  against  the  plaintiti'.* 

But  because  of  tlie  general  language  used  in  the  description  of  the  prop- 
erty in  the  libel  of  information  and  in  the  deed  of  the  marshal,  it  is  con- 
tended that  something  more  than  the  estate  of  the  offender  Conrad  was 
warranted  by  the  United  States  to  the  purchaser,  and  the  warranty  having 
failed,  that  he  is  entitled  to  a  return  of  the  purchase  money  ;  but  this 
position  is  without  even  plausible  foundation.  As  already  stated,  the 
l>laintiffwas  presumed  to  know  the  law  on  the  subject,  and  that  by  his 
purchase  under  the  decree  he  could  only  acquire  such  an  estate  as  the 
alleged  offender  possessed,  to  hold  during  the  offender's  life  ;  and  that  if 
the  offender  had  no  estate  none  was  forfeited  to  the  United  States,  or  sold 
under  the  decree  of  the  court.  So  no  false  assurance  could  have  been 
made  to  the  purchaser  which  could  be  suggested  as  a  possible  ground  for 
the  return  of  the  money ;  nor  could  there  have  been  any  mistake  of  Aict 
which  would  be  recognized  as  a  ground  for  relief  even  in  equity,  for  the 
fact  suggested  as  having  been  misunderstood  was  declared  by  the  law. 

Besides,  the  title  to  the  property  sold  under  judicial  process  is  not  war- 
ranted by  the  party  obtaining  the  judgment  of  the  court.  "Whatever  title 
the  law  gives,  the  purchaser  takes,  no  more  and  no  less;  and  he  must  gov- 
ern himself  accordingly.  Any  different  rule  prevailing  on  this  subject  in 
Louisiana  or  any  other  State  by  statute  cannot  change  the  position  of  the 
United  States  with  respect  to  judicial  sales  in  proceedings  instituted  by 
them. 

Nor  is  this  position  at  all  affected  by  the  doctrine  that  upon  the  reversal 
of  a  judgment  under  which  a  sale  has  been  had,  the  purchaser  is  entitled 
to  a  return  of  his  money.  There  has  been  no  reversal  of  the  judgment  in 
the  confiscation  proceedings  against  Conrad.  On  the  contrary,  it  has  been 
affirmed. 

Judgment  ajinned. 

»  96  U.  S.  279. 


182  MARTIN  V.   SITWELL.  [CHAP.  II. 


(b.)   Mistake  may  hz  as  to  the  Creation  of  a  Contract. 

MARTIN   V.   SITWELL. 

In  the  King's  Bench,  Easter  Term,  1692. 

[Reported  in  1  Shower,  156.] 

Indebitatus  assumpsit  for  five  pounds  received  by  the  defendant  to  the 
plaintiff's  use,  non  assumpsit  pleaded. 

Upon  evidence  it  appeared  that  one  Barksdale  had  made  a  policy  of 
assurance  upon  account  for  five  pounds  premium  in  the  plaintiff's  name, 
and  that  he  had  paid  the  said  premium  to  the  defendant,  and  that  Barks- 
dale  had  no  goods  then  on  board,  and  so  the  policy  was  void,  and  the 
money  to  be  returned  by  the  custom  of  merchants. 

At  the  trial  I  urged  these  two  points.  First,  That  the  action  ought 
to  have  been  brought  in  Barksdalc's  name,  for  the  money  was  his,  we 
received  it  from  him,  and  if  the  policy  had  been  good  it  would  have  been 
to  his  advantage ;  and  upon  no  account  could  it  be  said  to  be  received  to 
Martin's  use,  it  never  being  his  money.  Besides,  here  may  be  a  great 
fraud  upon  all  insurers,  in  this,  that  an  insurance  may  be  in  another  man's 
name,  and  if  a  loss  happen  then  the  insurer  shall  pay,  for  that  some  cestui 
que  trust  had  goods  on  board  ;  if  the  ship  arrive,  then  the  nominal  trustee 
shall  bring  a  general  indebitatus  for  the  premium,  as  having  no  goods  on 
board. 

To  all  which  Holt,  Chief  Justice,  answered,  that  the  policy  being  in 
Martin's  name,  the  premium  was  paid  in  his  name  and  as  his  money,  and 
he  must  bring  the  action  upon  a  loss,  and  so  upon  avoidance  of  the  policy 
for  to  recover  back  the  premium.  And  as  to  the  inconveniences,  it  would 
be  the  same  whosoever  was  to  bring  the  action,  and  thei-efore  the  insurers 
ought  with  caution  to  look  to  that  beforehand. 

Then,  secondly,  I  urged  that  it  ought  to  have  been  a  special  action  of 
the  case  upon  the  custom  of  merchants,  for  this  money  was  once  well  paid, 
and  then  by  the  custom  it  is  to  be  returned  upon  matter  happening  ex  post 
facto.  I  argued  if  the  first  payment  were  made  void,  then  the  law  will 
construe  it  to  be  to  the  plaintiff's  use,  and  so  an  indebitatus  assrimpsit  will 
lie.  But  when  a  special  custom  appoints  a  return  of  the  premium,  an  in- 
debitatus lies  not,  as  for  money  received  to  the  plaintiff's  use,  but  a  special 
action  of  the  case  upon  that  particular  custom. 

To  which  Holt,  Chief  Justice,  answered  me  with  the  case  adjudged  by 
"Wadham  AVyndham,  of  money  deposited  upon  a  wager  concerning  a  race, 
that  the  party  winning  the  race  might  bring  an  indebitatus  for  money  re- 


SECT.  I.]  KILGOUR  V.   FIXLYSON.  183 

ceived  to  his  use,  for  now  by  this  subsequent  matter  it  is  become  as  such. 
And  as  to  our  case  the  money  is  not  only  to  be  returned  by  the  custom, 
but  the  policy  is  made  originally  void,  the  party  for  whose  use  it  was  made 
having  no  goods  on  board  ;  so  that  by  this  discovery  the  money  was  re- 
ceived without  any  reason,  occasion,  or  consideration,  and  consequently  it 
was  originally  received  to  the  plaintiff's  use. 

And  so  judgment  was  for  the  plaintiff  against  my  client. 


KILGOUR  V.    FINLYSON,   GALBREATH   &   HARPER. 
In  the  Common  Pleas,  February  11,  1789. 

[Reported  in  1  llenri/  BlacLstone,  155.] 

Indorsee  against  the  ostensible  indorsers,  who  also  appeared  to  be  the 
drawers  of  a  bill  of  exchange.  Money  paid,  money  had  and  received, 
account  stated.     Verdict  for  the  plaintiff. 

The  circumstances  of  this  case  were  as  follows  :  — 

The  plaintiff  was  a  warehouseman  and  factor,  the  defendants  were  also 
warehousemen  and  factors  in  partnership,  from  Midsummer  1785,  to  the 
28th  of  July,  1787,  when  the  partnership  was  dissolved,  and  notice  of  the 
dissolution  given  in  the  Gazette  as  under,  — 

Notice  is  hereby  given,  that  the  copartnership  between  Thomas 
Finlyson,  Thomas  Galbreath,  and  Henry  William  Harper,  of  Bow  church- 
yard, warehouseman,  under  the  firm  of  Finlyson,  Galbreath,  and  Harper, 
and  also  at  Glasgow,  under  the  firm  of  Henry  William  Harper  and  company, 
was  by  mutual  consent  dissolved  this  day;  all  demands  upon  the  above  firm 
will  be  paid  by  Thomas  Finlyson  of  Bow  church-yard,  who  is  impowered  to 
receive  and  discharge  all  debts  due  to  the  said  copartnership. 

Witness  our  hands,  this  28th  day  of  July,  1787, 

Thomas  Finlyson, 
Thomas  Galbreath, 
Henry  Wh>liam  Harper. 

At  the  time  of  the  above  di.ssolution  one  Scott  was  indebted  to  the  part- 
nership in  758^.  and  the  partnership  indebted  to  Sterling  Douglas  &  Co. 
in  800/.  On  the  21st  of  September,  1787,  Finlyson  drew  the  bill  in  ques- 
tion in  the  name  of  the  late  partnership,  on  Scott,  payable  on  the  23d  of 
November  following,  for  304/.  2.<t.,  which  Scott  accepted.  On  the  9th  of 
October,  Finlyson  indorsed  it,  in  the  name  of  the  partnership,  to  the  plain- 
tiff, who  discounted  it,  by  giving  his  own  promissory  note  for  304/.  3s.  Gd. 
payable  on  the  2.5th  of  November  (the  difference  of  Is.  Gd.  being  on  ac- 
count of  the  note  being  due  two  days  later  than  the  bill).     This  note  of 


184  KILGOUR  V.   FINLYSON.  [CHAP.  II. 

the  plaintiff's  was  indorsed  by  Finlyson  to  Sterling  Douglas  &  Co.,  who 
discounted  it,  and  received  the  money  they  had  advanced  by  so  discount- 
ing the  note,  back  again  from  Finlyson,  in  part  of  payment  of  the  debt 
owing  to  them  from  the  partnerehip.  When  the  note  became  due  the 
plaintiff  paid  it  to  Sterling  Douglas  &  Co.  Two  days  before  Scott's  bill 
became  due  Finlyson  took  it  up,  and  gave  in  lieu  of  it  another  bill  to  the 
plaintiff,  accepted  by  Lee,  Strachan,  &  Co.,  but  did  not  take  back  Scott's 
bill.  Afterwards  Lee,  Strachan,  &  Co.'s  bill  not  being  paid,  and  Finlyson 
having  become  a  bankrupt,  the  plaintiff  brought  this  action  against  all 
the  partners  on  Scott's  bill,  which  remained  in  his  hands,  and  obtained  a 
verdict. 

A  rule  being  granted  to  show  cause  why  this  verdict  should  not  be  set 
aside,  and  a  new  trial  granted, 

Adair  and  Bond,  Serjts.,  showed  cause.  They  acknowledged  that  the 
action  on  the  bill  could  not  be  supported,  but  contended  that  the  plaintiff 
was  entitled  to  retain  his  verdict,  having  paid  money  to  the  use  of  the 
defendants,  at  the  special  instance  and  request  of  a  person  authorized  by 
them  to  receive  and  pay  their  debts. 

Le  Blanc  and  Lawrence,  Serjts.,  for  the  rule  argued,  that  it  ought  to  have 
been  shown,  that  the  money  was  actually  paid  in  discharge  of  a  partner- 
ship debt ;  if  it  were  paid  when  Finlyson  had  no  right  to  pledge  the  credit 
of  the  partnership,  it  was  not  paid  to  the  use  of  the  partnership.  But 
admitting  that  it  was  paid  for  a  partnership  debt,  yet  being  paid  without 
the  knowledge  and  request  of  the  defendants  it  could  not  be  sufficient  to 
raise  an  assumpsit.  Finlyson  had  no  authority  to  borrow  money  to  pay 
their  debt,  or  to  contract  for  them  without  their  consent.  This  case  must 
be  considered  as  already  decided  by  Lord  Kenyon  ^  in  the  King's  Bench. 

Adair  replied,  that  in  the  case  cited  it  was  only  holden  that  an  action 
could  not  be  maintained  on  the  bill  of  exchange.  The  reason  of  which  was, 
that  the  bill,  being  negotiable,  and  going  into  the  hands  of  persons  who 
might  not  know  the  consideration  for  which  it  was  given,  must  be  binding 
when  given,  or  not  at  all.  The  authority  of  the  drawer  must  be  indepen- 
dent of  any  application  of  the  money.  But  no  such  inconvenience  could 
arise  from  the  action  for  money  paid.  It  is  admitted  that  Finlyson  paid 
the  money  of  the  plaintiff  in  discharge  of  a  partnership  debt;  he  had  full 
authority  from  the  other  defendants  to  receive  and  pay  :  he  therefore  ap- 
plied to  the  plaintiff  for  his  note  at  their  special  instance  and  request. 

Lord  Loughborough.  I  was  of  opinion  at  the  trial,  that  there  was  an 
equity  in  favor  of  the  plaintiff,  the  money  arising  from  his  note  being  de 
facto  applied  for  the  benefit  of  the  partnership,  and  the  authority  from  the 

1  In  a  case  between  the  Bank  of  England,  plaintiffs,  and  the  same  defendants,  in  which 
the  circumstances  were  the  same  as  the  present,  there  was  a  demurrer  to  the  evidence 
which  was  not  argued  in  court,  but  Lord  Kenyon  at  the  trial  gave  it  as  his  opinion,  that 
the  action  on  the  hill  could  not  be  maintained. 


SECT.  I.]  TAYLOR  V.   HARE.  185 

other  partners  giving  him  power  to  discharge  their  debts.  But  I  am  now 
convinced  that  I  was  mistaken.  Consider  the  nature  of  this  transaction : 
Finlyson  applies  to  Kilgour  to  discount  the  bill  accepted  by  Scott,  and  in 
part  of  the  discount  takes  a  promissory  note  from  him ;  Kilgour,  before 
Scott's  bill  became  due,  changes  it  with  Finlyson  for  another,  accepted  by 
Lee,  Strachan,  &  Co.,  returns  that,  and  takes  Scott's  bill  back  again.  Now 
all  this  was  carried  on  without  any  idea  of  the  former  partners  being  bound 
by  it.  On  the  10th  of  October,  long  before  the  plaintiff's  note  was  due, 
the  defendant  applied  to  Sterling  Douglas  &  Co.  to  discount  it,  who  accord- 
ingly did  discount  it,  but  received  the  money  back  again  in  part  of  pay- 
ment of  their  debt  owing  from  the  partnership.  When  this  note  became 
due  the  plaintiff  paid  it  to  Sterling  Douglas  &  Co.,  but  at  that  time  no 
debt  was  owing  to  them  from  the  partnership ;  the  payment  therefore  of 
the  plaintiff  was  not  a  payment  to  the  use  of  the  partnership.  Though  the 
money  raised  by  discounting  his  note  before  it  was  due  was  in  fact  paid  in 
discharge  of  a  partnership  debt,  yet  he  cannot  follow  the  money  through 
all  the  applications  of  it  made  by  Finlyson. 

Heath  and  Wilson,*  Justices,  of  the  same  opinion. 

Bide  absolute  for  a  new  t7'ial. 


JOHN  VICKRIS   TAYLOR  (survivixg  Partner  of  FREEMAN 
HARTFORD,  deceased)   v.   RICHARD   HARE. 

In  the  Common  Pleas,  May  20,  1805. 

[Reported  in  1  Bosanqnet  ^-  Puller,  New  Reports,  260.] 

This  was  an  action  for  money  had  and  received,  which  came  on  to  be 
tried  before  the  Lord  Chief  Justice  at  the  sittings  after  last  Hilary  term, 
when  a  verdict  was  found  for  the  plaintiff  for  425/.,  subject  to  the  opinion 
of  the  court  upon  the  following  case. 

On  the  12th  of  September,  1791,  the  defendant  took  out  a  patent  for  the 
invention  of  an  apparatus  for  preserving  the  essential  oil  of  hops  in  brew- 
ing. By  articles  of  agreement,  dated  5th  of  November,  1792  (which  were 
set  out  at  length  at  the  end  of  the  case),  and  made  between  the  defendant 
of  the  one  part,  and  the  plaintiff  and  his  said  late  partner  of  the  other  part, 
reciting  the  defendant's  patent,  and  that  it  gave  him  the  sole  power,  privi- 
lege, and  authority  of  using,  exercising,  and  vending  his  said  invention  for 
the  terra  of  fourteen  years,  the  defendant  granted  to  the  plaintiff  and  his 
said  late  partner  the  privilege  of  making,  using,  and  exercising  the  said 
invention  for  the  residue  of  the  said  term  of  fourteen  years,  and  in  consid- 
eration thereof  the  plaintiff  and  his  partner  covenanted  that  they  would 

^  Mr.  Justice  Gould   In-ing  absent. 


186  TAYLOR   V.   HAEE.  [CHAP.  II. 

secure  to  be  paid  to  the  defendant  during  the  said  term  an  annuity  of  100^., 
and  would  give  their  bond  for  that  purpose,  and  a  bond  was  accordingly 
given,  conditioned  for  the  payment  of  the  said  annuity.  The  plaintiff  and 
his  said  late  partner  used  the  apparatus  (for  the  making  and  preparing  of 
■which  they  paid  a  distinct  price)  from  the  date  of  the  said  agreement  until 
the  25th  day  of  March,  1797,  and  during  all  that  time  regularly  paid  the 
said  annuity  to  the  said  defendant.  The  defendant  was  not  the  inventor  of 
the  invention  for  which  he  obtained  his  patent.  The  invention  was  not 
new  as  to  the  public  use  and  service  thereof  in  England,  but  it  was  the  in- 
vention of  one  Thomas  Sutton  Wood,  and  had  been  publicly  used  in  Eng- 
land by  said  Wood  and  others  before  the  defendant  obtained  his  patent. 
But  the  patent  had  never  been  repealed.  The  amount  of  the  annuity  which 
they  had  paid  was  425^.  If  the  court  should  be  of  opinion  that  the  plain- 
tiff was  entitled  to  recover  back  the  money  which  was  paid  on  the  bond, 
the  verdict  was  to  stand.  If  the  court  should  be  of  a  contrary  opinion,  a 
nonsuit  was  to  be  entered. 

Bayley,  Serjt.,  for  the  plaintiff.  To  support  the  present  action  it  is  not 
necessary  to  prove  that  any  imposition  has  been  practised.  If  it  appear 
that  the  plaintiff  has  received  nothing  in  return  for  the  money  which  he 
has  paid,  he  is  entitled  to  recover  back  his  money  in  this  form  of  action. 
He  was  induced  to  pay  his  money  upon  the  supposition  that  the  defendant 
had  the  power  of  communicating  some  privilege.  But  as  it  now  appears 
that  the  defendant's  invention  was  not  new,  and  that  the  patent  was  there- 
fore void,  the  consideration  upon  which  the  plaintiff  paid  his  money  has 
wholly  failed,  and  the  plaintiff  has  derived  no  benefit  whatever.  Where  an 
estate  is  conveyed,  the  vendor  professes  to  convey  nothing  but  his  title  to 
that  estate.  But  here  the  thing  itself  which  was  the  subject  of  the  agree- 
ment had  no  existence.  It  was  the  understanding  of  all  parties  that  the 
defendant  was  entitled  to  a  patent-right ;  but  it  now  turns  out  that  they 
were  mistaken ;  the  plaintifi'  therefore  is  entitled  to  recover  the  money 
which  he  has  paid  under  a  mistake.  He  had  a  right  to  make  use  of  the 
invention  without  paying  anything  for  it.  The  defendant  has  no  right  to 
the  annuity,  and  indeed  he  has  already  failed  in  an  action  on  the  bond  in 
which  the  validity  of  the  patent  was  put  in  issue. 

Sir  James  Mansfield,  C.  J.  (stopping  Cochell,  Serjt.,  for  the  defendant). 
It  is  not  pretended  that  any  action  like  the  present  has  ever  been  known. 
In  this  case  two  persons  equally  innocent  make  a  bargain  about  the  use  of  a 
patent,  the  defendant  supposing  himself  to  be  in  possession  of  a  valuable 
patent-right,  and  the  plaintiff  supposing  the  same  thing.  Under  these  cir- 
cumstances the  latter  agrees  to  pay  the  former  for  the  use  of  the  invention, 
and  he  has  the  use  of  it ;  non  constat  what  advantage  he  made  of  it ;  for 
anything  that  appears  he  may  have  made  considerable  profit.  These  per- 
sons may  be  considered  in  some  measure  as  partners  in  the  benefit  of  this 
invention.     In  consideration  of  a  certain  sum  of  money  the  defendant  per- 


SECT.  I.]  FEISE    I'.    PARKINSON.  187 

mits  the  plaintiff  to  make  use  of  this  invention,  which  he  would  never  have 
thought  of  using  had  not  the  privilege  been  transferred  to  him.  How  then 
can  we  say  that  the  plaintiff  ought  to  recover  back  all  that  he  has  paid  1 
I  think  that  there  must  be  judgment  for  the  defendant. 

Heath,  J.  There  never  has  been  a  case  and  there  never  will  be,  in 
which  a  plaintiff,  having  received  benefit  from  a  thing  which  has  afterwards 
been  recovered  from  him,  has  been  allowed  to  maintain  an  action  for  the 
consideration  originally  paid.  We  cannot  take  an  account  here  of  the 
profits.  It  might  as  well  be  said,  that  if  a  man  lease  land,  and  the  lessee 
pay  rent,  and  afterwards  be  evicted,  that  he  shall  recover  back  the  rent, 
though  he  has  taken  the  fruits  of  the  land. 

RoOKE,  J.     I  am  of  the  same  opinion. 

Chambre,  J.  The  plaintiff  has  had  the  enjoj'ment  of  what  he  stipulated 
for,  and  in  this  action  the  court  ought  not  to  interfere,  unless  there  be 
something  ex  cequo  et  bono  which  shows  that  the  defendant  ought  to  refund. 
Here  both  parties  have  been  mistaken ;  the  defendant  has  thrown  away  his 
money  in  obtaining  a  patent  for  his  own  invention ;  not  so  the  plaintiff,  for 
he  has  had  the  use  of  another  person's  invention  for  his  money.  In  the 
case  of  Arkwright's  patent,  which  was  not  overturned  till  very  near  the 
period  at  which  it  would  have  expired,  very  large  sums  of  money  had  been 
paid  ;  and  though  something  certainly  was  paid  for  the  use  of  the  machines, 
yet  the  main  part  was  paid  for  the  privilege  of  using  the  patent-right,  but 
no  money  ever  was  recovered  back  which  had  been  paid  for  the  use  of  that 
patent.  I  am  therefore  of  opinion  that  judgment  of  nonsuit  should  be 
entered. 

Jvxigment  of  nonsuit. 


FEISE  V.   PARKINSON. 
In  the  Common  Pleas,  November  18,  1812. 

[Reported  in  4  Tauulon,  640] 

This  was  an  action  upon  a  policy,  at  and  from  Hamburgh,  or  any  port 
or  ports  in  the  Elbe,  to  I^indon,  or  any  other  port  or  ports  of  the  United 
Kingdom.  Upon  the  trial  of  this  cause  at  Guildhall,  at  the  sittings  after 
the  last  Michaelmas  term  before  Mansfield,  C.  J.,  the  plaintiff  proved  the 
subscription,  loss,  and  interest ;  and  the  defendant  rested  his  case  upon  a 
misrepresentation  made  to  the  first  underwriter  at  the  time  of  effecting  the 
policy,  to  whom,  as  it  was  sworn  by  the  broker,  the  plaintiff  had  stated  that 
the  ship  had  both  an  Englisii  licence  and  a  French  imperial  licence,  whereas 
the  fact  was,  that  the  ship  had  an  English  licence,  and  a  FitucIi  pass  from 
Cuxhaven,  which  enabled  her  to  come  down  the  Elbe  from  Hamburgh,  and 
put  to  sea  without  molestation  at  Cuxhaven,  but  by  no  means  operated  as 


188  m'culloch  v.  royal  exchange  assurance  CO.     [chap.  II. 

a  licence  to  her  to  trade  with  England ;  and  it  was  sworn  that  the  circum- 
stance of  having  a  French  imperial  licence  made  a  considerable  difference 
in  the  amount  of  the  premium  of  insuring  such  a  voyage  at  the  time  when 
this  policy  was  effected.     The  jury  found  a  verdict  for  the  defendant. 

Shepherd,  Serjt.,  for  the  plaintiff. 

Leyis,  Serjt.,  for  the  defendant. 

GiBBS,  J,  "Where  there  is  a  fraud  there  is  no  return  of  premium,  but 
upon  a  mere  misrepresentation  without  fraud,  where  the  risk  never  at- 
tached, there  must  be  a  return  of  premium.  This  business  is  conducted 
on  the  part  of  the  assureds,  with  the  utmost  imprudence  ;  these  transac- 
tions are  done  by  parol  between  the  plaintiff  and  defendant,  the  broker  only 
present,  and  on  which  side  his  interest  leans,  if  he  be  dishonest,  all  know  ; 
as  long  as  it  is  the  law,  we  must  admit  it ;  but  this  is  one,  among  other 
proofs,  of  the  mischievous  tendency  of  admitting  parol  evidence  of  what 
passes  at  the  time  of  making  written  instruments,  to  control  them.  It  is 
clear  that  the  plaintifi"  is  not  entitled  to  a  new  trial  on  the  first  ground.  I 
think  it  equally  clear  that  the  plaintiff  is  entitled  to  enter  his  verdict  on 
the  count  for  money  had  and  received  for  the  premium,  but  as  the  return 
of  premium  was  not  claimed  at  the  trial,  that  cannot  be  done  without  the 
defendant's  consent.  Upon  the  other  counts  the  verdict  must  be  for  the 
defendant ;  if  the  defendant  will  not  consent,  the  court  must  grant  a  new 
trial  generally. 

On  the  following  day.  Lens,  after  consulting  his  clients,  consented  to  the 
plaintiffs  taking  a  verdict  for  the  premium  ;  and  that  branch  of  the  rule 
was  therefore  made  absolute. 


M'CULLOCH  V.  EOYAL  EXCHANGE  ASSURANCE   COMPANY. 
At  Nisi  Prius.     Before  Lord  Ellenborough,  C.  J.,  June  14,  1813. 

[Reported  in  3  Campbell,  406.] 

This  was  an  action  of  debt  for  money  had  and  received,  to  recover  the 
sum  of  1260^.  as  a  return  of  premium  upon  a  policy  of  insurance  executed 
by  the  defendants. 

The  case  came  on  upon  admissions,  which  stated :  — 

"That  on  the  21st  of  August,  1812,  a  policy  of  insurance  was  effected 
by  Messrs.  Amyand,  Cornwall,  &  Co.  with  the  defendants,  by  the  order  and 
on  account  of  the  plaintiff,  for  the  sum  of  7000/.,  upon  the  ship  Duke  of 
Kent,  and  her  freight,  being  4000/.  upon  the  ship,  and  3000/.  on  freight,  on 
a  voyage  from  Saint  Domingo  to  the  port  of  London,  at  a  premium  of  21/. 
per  cent. 


SECT.  I.]        M'CULLOCH   V.   KOYAL   EXCHANGE   ASSURANCE   CO.  189 

"That  a  return  of  premium  for  the  ship's  sailing  armed  with  12  guns, 
and  arrival  as  stipulated  by  the  policy,  has  been  made  by  the  defendants, 
leaving  the  sum  of  12G0/.  as  the  net  premium  paid  to  them  for  efiecting 
the  said  policy. 

"That  in  the  month  of  May,  1809,  the  said  ship  proceeded  upon  a  voy- 
age to  the  "West  Indies,  from  the  port  of  London ;  and  that  Mr.  Kichard 
Gardiner  was  then  the  sole  owner  thereof  in  the  register  of  the  port  of 
London,  and  that  he  is  now  the  sole  registered  owner  in  the  said  register 
in  the  said  port,  and  that  he  has  never  transferred  his  property  in  the  said 
ship  to  any  person,  nor  has  the  same  ever  been  transferred  by  his  consent 
or  authority. 

"  That  the  said  ship  arrived  at  Martinique,  where  she  took  in  a  cargo  on 
freiglit  for  Europe,  and  sailed  from  thence  on  the  1st  of  August,  1809. 

"  That  having  met  with  damage  on  the  said  last-mentioned  voyage,  the 
said  ship  put  into  the  harbor  of  St.  John's,  Antigua,  in  distress  ;  and,  after 
being  surveyed  by  a  warrant  from  the  Vice-Admiralty  Court  of  that  island, 
she  was  condemned  to  be  sold  as  being  \mfit  to  be  repaired  ;  and  was  ac- 
cordingly sold,  by  virtue  of  an  order  of  the  said  Vice-Admiralty  Court,  to 
Matthew  King. 

"  That  Matthew  King  afterwards  obtained  from  the  proper  officer  of  the 
customs  of  the  said  island  a  new  colonial  register  for  the  ship,  and  re- 
mained in  possession  of  her  till  September,  1811,  during  which  time  he 
caused  her  to  be  repaired  at  a  great  expense,  conceiving  that  he  had  ob- 
tained by  virtue  of  the  sale  hereinbefore  mentioned  a  full  and  complete 
title  to  the  said  ship. 

"  That  in  September,  1811,  the  said  Matthew  King  sold  the  said  ship  to 
the  plaintiff  at  Guadaloupe,  for  the  sum  of  $14,500,  and  executed  a  regular 
bill  of  sale  of  her  to  him,  at  which  time,  and  till  some  days  after  the  ar- 
rival of  the  ship  in  England  (as  hereinafter  mentioned),  the  plaintiff  had 
no  notice  or  knowledge  of  any  adverse  claim  or  title  to  the  said  ship,  but 
on  the  other  hand  was  fully  convinced  that  he  had  acquired  a  good  and 
sufficient  title  thereto. 

"That  the  plaintifl",  after  the  purchase  of  the  said  ship,  and  while  he 
retained  the  possession  thereof,  expended  the  sum  of  334G/.  in  various  dis- 
bursements for  the  use  of  the. said  ship,  and  for  the  outfit  of  the  voyage  in 
question. 

"That  the  plaintiff  employed  the  said  ship  in  a  coasting  voyage  to  the 
Spanish  Main;  and  in  June,  1812,  he  procured  a  freight  for  her  at  St. 
Domingo  for  London,  being  the  voyai!e  insured  by  the  j)<)licy  in  question, 
where  she  arrived  on  or  about  the  20th  of  September  last,  and  safely  de- 
livered her  cargo ;  and  the  freight  of  the  said  cargo,  amounting  to  about 
the  sum  of  2867/.  10*.  lb/.,  has  been  duly  paid  to  the  plaintiff. 

"  That  after  the  arrival  of  the  said  ship,  and  the  delivei-y  of  her  cargo, 
the  said  Richard  Gardiner  obtained  possession  of  the  said  ship  under  an 


190  SMOUT  V.   ILBERY.  [CHAP.  II. 

Admiralty  warrant,  and  now  seeks  to  recover  the  amount  of  the  freight  so 
paid  to  the  plaintiff." 

Scarlett,  Campbell,  and  Sjianhie  for  the  plaintiff. 

Garroiv,  A.  G.,  Park,  and  Bosanquet  for  the  defendants. 

Lord  Ellen'borough.  In  Routh  v.  Thompson,  a  loss  had  happened, 
and  an  action  was  brought  against  the  underwriters  to  recover  the  sum 
insured.  They  resisted  the  demand  on  the  ground  that  there  was  no  in- 
surable interest.  As  they  denied  their  liability  on  the  policy,  tliey  were 
not,  under  these  circumstances,  allowed  to  retain  the  premium.  But  here 
the  voyage  has  been  performed,  and  the  ship  has  arrived  in  safety.  The 
freight  has  been  earned  and  paid.  It  strikes  me  as  now  too  late  to  rip  up 
the  matter,  and  to  say  you  had  no  insurable  interest.  You  might  have  re- 
scinded the  contract  before  the  event  :  but  after  that  has  been  determined 
in  favor  of  the  underwriters,  it  does  not  lie  in  your  mouth  to  tell  them  they 
never  were  liable,  and  that  the  premium  was  a  payment  without  considera- 
tion. I  am  perfectly  clear  the  plaintiff  has  no  right  to  recover.  It  would 
place  underwriters  in  a  very  awkward  situation,  if  after  the  safe  arrival  of 
the  ship,  the  assured  could  come  to  them  and  say,  *'  We  had  no  legal  title 
to  her;  on  account  of  some  secret  transactions  which  you  had  no  means  of 
investigating,  we  had  no  insurable  interest;  and  you  must  pay  us  back  the 
premium  which  you  imagined  you  had  earned." 

Plaintiff  nonsuited. 


SMOUT  V.  MARY  ANN   ILBERY. 

In  the  Exchequer,  May  23,  1842. 

[Reported  in  10  Meeson  and  Welshy,  1.] 

Debt  for  goods  sold  and  delivered,  and  on  an  account  stated. 

Pleas,  first,  except  as  to  <£6  7s.,  parcel,  etc.,  nunqtiam  indebitatus;  secondly, 
except  as  to  the  said  sum  of  £6  7s.,  parcel,  etc.,  payment ;  thirdly,  as  to 
the  sum  of  £6  7s.,  parcel,  etc.,  payment  into  court  of  that  sum,  and  7iun- 
quam  indebitatus  idtra.  The  replication  took  issue  on  the  first  plea,  denied 
the  payment  alleged  in  the  second,  and  accepted  the  £6  7s.,  in  satisfaction 
as  to  so  much  of  the  debt  demanded. 

At  the  trial  before  Gurnet,  B.,  at  the  Middlesex  sittings  in  Michaelmas 
term,  1841,  it  appeared  that  the  plaintiff  was  a  butcher,  and  the  defendant 
the  widow  of  James  Ilbery,  who  left  England  for  China  in  May,  1839,  and 
was  lost  in  the  outward  voyage,  on  the  14th  October,  1839.  The  news  of 
his  death  arrived  in  England  on  the  13th  of  March,  1840.  The  plaintiff 
had  supplied  meat  to  the  family  before  Mr.  Ilbery  sailed,  and  during  his 
voyage,  and  the  supply  continued  down  to  the  time  of  the  news  of  his 
death,  and  even  afterwards.     Upon  the   14th  October,   1839,  the   day  of 


SECT.  I.]  SMOUT  V.   ILBERY.  191 

Mr.  Ilbery's  death,  the  amouut  of  the  debt  was  £32  135.  \ld.  Between 
that  day  and  the  arrival  of  the  news  of  the  death,  meat  had  been  supplied 
to  the  amount  of  £19  95.  ;  and  after  that,  the  snpply  amounted  to  £G  75. 

This  action  was  brought  for  these  two  sums  (together)  £25  IG5.  The 
defendant  paid  £G  7s.  into  court,  and  relied  on  a  payment  of  £20,  as  dis- 
charging her  from  the  plaintiti's  claim  for  meat  supplied  after  the  date  of 
her  husband's  death  ;  and  the  counsel  for  the  defendant  gave  in  evidence 
the  following  receipt  signed  by  the  plaintilf,  dated  the  30th  March,  1840  : 
''  Received  of  Mrs.  Ilbery,  £20."  The  plaintiff  insisted  that  the  £20  had 
been  paid  generally  on  account,  and  must  be  applied  as  a  payment  by  the 
executors  in  part  satisfaction  of  the  debt  of  the  husband  ;  and  called 
Mr.  Dollman,  the  executor.  From  his  evidence  it  appeared,  that  Mr,  Ilbery 
had  left  the  management  of  his  affairs  in  his  hands,  and  whenever  I^Irs. 
Ilber}'  wanted  money,  she  had  it  from  him.  Dollman  and  Mrs.  Ilbery 
were,  by  Ilbery's  will,  appointed  executor  and  executrix ;  but  he  alone 
proved  the  will,  on  the  21st  March,  1840,  power  being  reserved  in  the 
usual  way  for  her  to  prove  also.  On  the  28th  March,  Mr.  Dollman  gave 
Mrs.  Ilbery  five  or  six  cheques,  and  among  others,  one  for  £20,  payable  to 
the  plaintiff.  This  cheque  she  paid  to  the  plaiutifi",  and  took  his  receipt  as 
above  mentioned. 

At  that  time  it  was  supposed  that  Ilbery's  estate  was  solvent.  It  turned 
out  to  be  otherwise  ;  and  Dollman,  who  was  engaged  with  him  in  the 
adventure  to  China,  had  become  bankrupt. 

The  question  left  to  the  jury  was,  whether  the  £20  was  paid  on  the  ex- 
ecutorship account,  or  on  the  account  of  Mrs.  Ilbery  only,  and  in  discharge 
of  that  debt  which  (on  both  sides,  as  well  as  in  the  learned  judge's  opinion) 
was  taken  to  have  been  due  from  her. 

The  jury  found  that  it  was  paid  on  the  executorship  account,  and  gave 
their  verdict  for  the  plaintiff  for  £19  9s.,  the  price  of  the  meat  supplied 
between  the  day  of  Mr.  Ilbery's  death  and  the  arrival  of  the  intelligence 
of  it.  A  rule  having  been  obtained  in  Michaelmas  term  to  show  cause 
why  that  verdict  should  not  be  set  aside,  and  a  new  trial  had,  on  the  ground 
that  the  defendant  was  not  liable  for  the  meat  supplied  after,  but  before 
she  had  any  knowledge  of,  her  husband's  death.' 

Ilindmarch?  The  defendant  having  accepted  the  meat  supplied  to  her, 
and  used  it,  there  is  a  contract  implied  by  law  on  the  part  of  some  person 
to  pay  the  price  of  the  meat ;  and  as  the  husband  was  dead,  and  she  had 
no  authority  to  bind  his  executors,  a  contract  must  bo  implied  on  her  part 
to  pay  for  the  meat  supplied  to  her  after  her  husband's  death  ;  and  she  is 
not  to  be  allowed  to  get  rid  of  her  liability  by  saying,  that  at  the  time  she 
gave  the  orders  or  accepted  the  goods,  she  thought  her  husband  was  alive, 

*  This  point  wa,<i  not  made  at  tho  trial,  and  therefore  there  could  bo  no  motion  for  a 
nonsuit. 

^  A  jportion  of  the  argument  r(;latiiig  to  questions  of  agency  has  hccii  omitted.  —  En. 


192  SMOUT   V.    ILBERY.  [CHAP.  II. 

and  that  bhe  was  contracting  on  his  behalf.  In  Thomson  v.  Davenport,^ 
where,  at  the  time  of  making  a  contract  of  sale,  the  party  buying  the  goods 
represented  that  he  was  buying  them  on  account  of  persons  resident  in 
Scotland,  but  did  not  mention  their  names,  and  the  seller  did  not  inqnire 
who  they  were,  but  afterwards  debited  the  party  who  purchased  the  goods ; 
it  was  held  that  the  seller  might  afterwards  sue  the  principals  for  the  price. 
There  the  vendor  actually  credited  the  agent,  and  yet  the  principal  was 
held  liable.  The  general  principle  is,  that  the  law  creates  an  implied  con- 
tract from  the  receipt  of  the  goods.  [Aldersox,  B.  —  Here  each  party 
thought  the  husband  was  responsible.]  That  can  make  no  difference,  for  it 
is  clear  that  there  could  be  no  contract  between  the  plaintiff  and  the  dead 
man  ;  and  there  was  no  contract  by  the  executor  with  the  plaintiff.  There 
is  a  fallacy  on  the  other  side,  in  assuming  that  there  was  a  prior  continuing 
contract  between  the  husband  and  the  plaintiff,  respecting  the  supply  of 
goods  to  the  wife.  An  action  for  goods  sold  and  delivered  is  not  necessarily 
founded  upon  a  contract  antecedent  to  the  delivery  of  the  goods ;  it  may 
be,  and  generally  is,  founded  upon  the  implied  contract  that  the  party  will 
pay  the  price  or  value  of  the  goods  delivered  and  accepted  by  him  ;  and 
there  are  as  many  implied  contracts  as  there  are  parcels  of  goods  delivered 
and  accepted.  If  there  was  no  prior  contract  at  all  in  the  present  case 
(which  it  is  clear  there  was  not),  then  the  moment  each  parcel  of  goods 
was  delivered  and  accepted,  the  law  implied  a  contract  by  the  defendant, 
who  received  and  accepted  them,  to  pay  the  price. 

£rle,  in  support  of  the  rule.  —  The  contract  in  this  case  was  a  continuing 
contract,  which  the  parties,  in  Blades  v.  Free,  failed  to  make  out.  This 
was  a  course  of  dealing  which  was  continued  in  consequence  of,  and  as  part 
of,  the  former  contract.  An  agent  ought  not  to  be  held  liable  where  he 
enters  into  a  contract  as  agent,  bona  fide  supposing  himself  to  have  authority, 
when  it  turns  out  that  he  had  none,  through  an  event  which  had  happened, 
but  of  which  he  was  not  cognizant,  and  had  no  means  of  knowing.  The 
evidence  here  was,  that  goods  were  supplied  by  the  plaintiff  to  the  husband 
during  his  residence  here,  and  were  afterwards  continued  to  be  supplied  to 
his  wife  after  he  left  this  country  ;  there  is  clearly  no  implied  conti'act 
arising  from  this  state  of  things,  that  she  would  pay  for  them.  Suppose 
the  case  of  the  husband  and  wife  having  both  gone  abroad,  and  having  left 
a  housekeeper  in  charge  of  the  house  and  the  children,  and  meat  is  supplied 
to  the  house,  and  the  Inisband  and  wife  are  both  drowned,  is  the  house- 
keeper to  be  liable,  because  she  ordered  the  meat  for  the  use  of  the  house'? 
[Alderson,  B.  —  In  the  same  way  it  may  be  said,  if  a  bachelor  leaves  a 
housekeeper  in  possession  of  his  house,  and  goes  abroad,  and  dies,  is  the 
housekeeper  to  be  liable  *?]  In  Polhill  v.  Walter,  there  was  the  making  of 
a  representation  which  the  party  making  it  knew  to  be  untrue.  If  Ilbery 
had  not  died,  he  would  have  been  clearly  liable,  and  the  account  was  in  his 

1  9  B.  &  C.  78  ;  4  Man.  &  R.  110. 


SECT.  I.]  SMOUT  V.    ILBERY.  193 

name.  As  to  the  argument  of  there  being  an  implied  contract,  that  merely 
amounts  to  this,  that  a  party  to  whom  goods  are  delivered  is  liable  for 
them ;  but  that  is  where  there  is  nothing  to  show  that  any  other  person 
was  responsible.  The  case  of  Blades  v.  Free  has  nothing  to  do  with  the 
present.  Ctir.  adv.  vidt. 

The  judgment  of  the  Court  was  now  delivered  by 

Aldersox,  B.  This  case  was  argued  at  the  sittings  after  last  Hilary 
terra,  before  my  Brothers  Gurney,  Rolfe,  and  myself.  The  facts  were 
shortly  these.  The  defendant  was  the  widow  of  a  Mr.  Ilbery,  who  died 
abroad ;  and  the  plaintiff,  during  the  husband's  lifetime,  had  supplied,  and 
after  his  death  had  continued  to  supply,  goods  for  the  use  of  the  family  in 
England.  The  husband  left  England  for  China  in  March,  1839,  and  died 
on  the  14th  day  of  October,  in  that  year.  The  news  of  his  death  first 
arrived  in  England  on  the  13th  day  of  March,  1840  ;  and  the  only  question 
now  remaining  for  the  decision  of  the  court  is,  whether  the  defendant  was 
liable  for  the  goods  supplied  after  her  husband's  death,  and  before  it  was 
possible  that  the  knowledge  of  that  fact  could  be  communicated  to  her. 
There  was  no  doubt  that  such  knowledge  was  communicated  to  her  as  soon 
as  it  was  possible ;  and  that  the  defendant  had  paid  into  court  sufficient  to 
cover  all  the  goods  supplied  to  the  family  by  the  plaintiff  subsequently  to 
the  13th  March,  1840. 

We  took  time  to  consider  this  question,  and  to  examine  the  authorities 
on  this  suVyect,  which  is  one  of  some  difficulty.  The  point,  how  far  an 
agent  is  personally  liable  who,  having  in  fact  no  authority,  professes  to  bind 
his  principal,  has  on  various  occasions  been  discussed.  There  is  no  doubt 
that  in  the  case  of  a  fraudulent  misrepresentation  of  his  authority,  with 
an  intention  to  deceive,  the  .agent  would  be  personally  responsible.  But 
independently  of  this,  which  is  perfectly  free  from  doubt,  there  seem  to  be 
still  two  other  classes  of  cases,  in  which  an  agent  who  without  actual 
authority  makes  a  contract  in  the  name  of  his  principal,  is  personally  lia- 
ble, even  where  no  proof  of  such  fraudulent  intention  can  be  given.  First, 
where  he  has  no  authority,  and  knows  it,  but  nevertheless  makes  the  con- 
tract as  having  such  authority.  In  that  case,  on  the  plainest  principles  of 
justice,  he  is  liable.  For  he  induces  the  other  party  to  enter  into  the 
contract  on  what  amounts  to  a  misrepresentation  of  a  fact  peculiarly  within 
his  own  knowledge ;  and  it  is  but  just,  that  he  who  does  so  should  be  con- 
sidered as  holding  himself  out  as  one  having  competent  authority  to  con- 
tract, and  as  guaranteeing  the  consequences  arising  from  any  want  of  such 
authority.  But  there  is  a  third  class,  in  which  the  courts  have  hold,  that 
where  a  party  making  the  contract  as  agent  bona  fide  believes  that  such 
authority  is  vested  in  him,  but  has  in  fact  no  such  authority,  he  is  still 
personally  liable.  In  these  cases  it  is  true,  the  agent  is  not  actuated  by 
any  fraudulent  motives ;  nor  has  he  made  any  statement  which  he  knows 
to  be  imtrue.     But  still   his  liability  depends  on  the  same  principles  as 

13 


194  SMOUT   V.    ILBERY.  [CHAP.  II. 

before.  It  is  a  wrong,  differing  only  in  degree,  but  not  in  its  essence,  from 
the  former  case,  to  state  as  true  what  the  individual  making  such  statement 
does  not  know  to  be  true,  even  though  he  does  not  know^  it  to  be  false,  but 
believes,  without  sufficient  grounds,  that  the  statement  will  ultimately  turn 
out  to  be  correct.  And  if  that  wrong  produces  injury  to  a  third  person, 
who  is  wholly  ignorant  of  the  grounds  on  which  such  belief  of  the  supposed 
agent  is  founded,  and  who  has  relied  on  the  correctness  of  his  assertion,  it 
is  equally  just  that  he  who  makes  such  assertion  should  be  pereonally  liable 
for  its  consequences. 

On  examination  of  the  authorities,  we  are  satisfied  that  all  the  cases  in 
which  the  agent  has  been  held  personally  responsible,  will  be  found  to  ar- 
range themselves  under  one  or  other  of  these  three  classes.  In  all  of  them 
it  will  be  found,  that  he  has  either  been  guilty  of  some  fraud,  has  made 
some  statement  which  he  knew  to  be  false,  or  has  stated  as  true  what  he 
did  not  know  to  be  true,  omitting  at  the  same  time  to  give  such  information 
to  the  other  contracting  party,  as  would  enable  him  equally  with  himself 
to  judge  as  to  the  authority  under  which  he  proposed  to  act. 

Of  the  first,  it  is  not  necessary  to  cite  any  instance.  Polhill  v.  "Walter ' 
is  an  instance  of  the  second ;  and  the  cases  where  the  agent  never  had  any 
authority  to  contract  at  all,  but  believed  that  he  had,  as  when  he  acted  on 
a  forged  warrant  of  attoraey,  which  he  thought  to  be  genuine,  and  the  like, 
are  instances  of  the  third  class.  To  these  may  be  added  those  cited  by 
Mr.  Justice  Story,  in  his  book  on  Agency,  p.  226,  note  3.  The  present 
case  seems  to  ns  to  be  distingtiishable  from  all  these  authorities.  Here 
the  agent  had  in  fact  full  authority  originally  to  contract,  and  did  contract 
in  the  name  of  the  principal.  There  is  no  ground  for  saying,  that  in  rep- 
resenting her  authority  as  continuing,  she  did  any  wrong  whatever.  There 
was  no  mala  fides  on  her  part,  no  want  of  due  diligence  in  acquiring 
knowledge  of  the  revocation,  no  omission  to  state  any  fact  within  her 
knowledge  relating  to  it ;  and  the  revocation  itself  was  by  the  act  of  God. 
The  continuance  of  the  life  of  the  principal  was,  under  these  circumstances, 
a  fact  equally  within  the  knowledge  of  both  contracting  parties.  If,  then, 
the  true  principle  derivable  from  the  cases  is,  that  there  must  be  some 
wrong  or  omission  of  right  on  the  part  of  the  agent,  in  order  to  make  him 
personally  liable  on  a  contract  made  in  the  name  of  his  principal,  it  will 
follow  that  the  agent  is  not  responsible  in  such  a  case  as  the  present.  And 
to  this  conclusion  we  have  come.  We  were,  in  the  course  of  the  argument, 
pressed  with  the  difficulty,  that  if  the  defendant  be  not  personally  liable, 
there  is  no  one  liable  on  this  contract  at  all ;  for  Blades  v.  Free  ^  has  de- 
cided, that  in  such  a  case  the  executors  of  the  husband  are  not  liable. 
This  may  be  so  :  but  we  do  not  think  that  if  it  be  so,  it  affords  to  us  a 
sufficient  ground  for  holding  the  defendant  liable.  In  the  ordinary  case  of 
a  wife  who  makes  a  contract  in  her  husband's  lifetime,  for  which  the  husband 
»  3  B.  &  Ad.  114.  2  9  B.  &  C.  167  ;  4  Man.  &  R.  282. 


SECT.  I.]  HIGGS   V.   SCOTT.  195 

is  not  liable,  the  same  consequence  follows.     In  that  case,  as  here,  no  one 
is  liable  upon  the  contract  so  made. 

Our  judgment,  on  the  present  occasion,  is  founded  on  general  principles 
applicable  to  all  agents ;  hut  we  think  it  right  also  to  advert  to  the  circum- 
stance, that  this  is  the  case  of  a  married  woman,  whose  situation  as  a  con- 
tracting party  is  of  a  peculiar  nature.  A  person  who  contracts  with  an 
ordinary  agent  contracts  with  one  capable  of  contracting  in  his  own  name  ; 
but  he  who  contracts  with  a  married  woman  knows  that  she  is  in  general 
incapable  of  making  any  contract  by  which  she  is  personally  bound.  The 
contract,  therefore,  made  with  the  husband  by  her  instrumentality,  may  be 
considered  as  equivalent  to  one  made  by  the  husband  exclusively  of  the 
a<Tent.  Now,  if  a  contract  were  made  on  the  terms,  that  the  agent,  having 
a  determinable  authorit\',  bound  his  principal,  but  expressly  stipulated  that 
he  should  not  be  personally  liable  himself,  it  seems  quite  reasonable  that, 
in  tlie  absence  of  all  mala  fides  on  the  part  of  the  agent,  no  responsibility 
.should  rest  upon  him ;  and,  as  it  appears  to  us,  a  married  woman,  situated 
as  the  defendant  was  in  this  case,  may  fairly  be  considered  as  an  agent  so 
stipulating  for  herself;  and  on  this  limited  ground,  therefore,  we  think  she 
would  not  be  liable  under  such  circumstances  as  these. 

For  these  reasons,  we  are  of  opinion  that  the  rule  for  a  new  trial  must 
be  absolute ;  but  as  the  point  was  not  taken  at  Nisi  Prius,  we  think  the 
costs  should  abide  the  event  of  the  new  trial. 

Rule  absolute  accordingly. 


niGGS    V.   SCOTT. 
In  the  Common  Pleas,  January  16,  1849. 

[Reported  in  7  Common  Bench  Reports,  63.] 

The  plaintiff  held  premises  as  tenant  from  year  to  year  to  the  defendant. 
After  the  commencement  of  the  tenancy,  the  defendant  mortgaged  her  term 
in  the  premises  to  a  Mrs.  Hardy.  The  interest  being  in  arrear,  the  mort- 
gagee, in  the  beginning  of  the  year  1848,  gave  the  plaintiff  notice  not  to 
pay  his  rent  to  the  defendant.  Upon  receipt  of  this  notice,  the  plaintiff 
went  with  one  Hawkins,  who  collected  the  defendant's  rents,  to  one  Hodg- 
kinson,  whom  Hawkins  represented  to  be  the  defendant's  attorney,  and  gave 
him  notice  of  Mrs.  Hiinly's  claim.  In  consequence  of  what  passed  upon 
that  occasion,  tlio  i)laiutiir,  on  the  18th  of  February,  1848,  paid  Hawkins 
the  amount  of  two  quarters'  rent,  less  the  property-tax.  After  this,  a  dis- 
tress was  put  in  upon  the  plaintiff's  premises,  under  which  the  plaintiff 
was  compelled  to  pay  the  two  quarters'  rent  over  again  to  Mrs.  Hardy,  the 
mortgagee.     The  present  action  was  brought  to  recover  back  the  money 


196  HIGGS   V.    SCOTT.  [CHAP.  H. 

SO  paid, — the  first  count  being  founded  upon  an  indemnity  given  by 
Hodgkinson  in  the  defendant's  name,  the  second  for  money  had  and 
received. 

In  support  of  his  case  under  the  first  count,  the  plaintiff  called  Hodg- 
kinson ;  but  the  Lord  Chief  Justice,  before  whom  the  cause  was  tried,  said 
he  would  allow  the  plaintiff  to  prove  notice  given  of  Mrs.  Hardy's  claim  to 
Hodgkinson,  but  not  that  he  had  given  the  indemnity.  The  plaintiti"  then 
relied  upon  the  facts  above  stated,  as  entitling  him  to  recover  back  as 
money  had  and  received,  the  two  quarters'  rent  he  had  paid  to  the  defend- 
ant after  the  date  of  the  notice. 

On  the  part  of  the  defendant,  it  was  objected,  first,  that  this  was,  in 
effect,  an  attempt  to  try  a  question  of  title  in  an  action  for  money  had  and 
received  ;  secondly,  that  the  payment  having  been  voluntarily  made,  with 
full  knowledge  of  the  facts,  the  plaintiff  could  not  recover  it  back. 

A  verdict  having  been  found  for  the  defendant,  with  leave  to  the  plain- 
tiff to  move  to  enter  a  verdict  for  19/.  2s.  Qd.,  if  the  court  should  be  of 
opinion  that  the  evidence  as  to  the  indemnity  was  improperly  rejected,  or 
that  the  plaintiff  was  entitled  to  recover  under  the  second  count. 

Byles,  Serjt.,  for  the  plaintiff. 

Cresswell,  J.  I  am  of  opinion  that  there  is  no  ground  for  impeaching 
the  decision  of  the  Lord  Chief  Justice  as  to  the  rejection  of  Hodgkinson's 
evidence.  Seeing  the  piirpose  for  which  it  was  tendered,  viz.,  to  prove  a 
contract,  to  make  which  there  was  no  evidence  of  Hodgkinson's  authority, 
it  was  properly  rejected. 

Then,  as  to  the  other  point,  —  the  plaintiff,  when  he  paid  the  money, 
knew  all  the  facts.  He  was  informed  of  them  ;  and  there  was  nothing  to 
show  he  had  not  received  correct  information.  When  a  party  is  told  that 
certain  deeds  have  been  executed,  he  knows  the  fact,  although  he  does  not 
see  the  deeds.  The  whole  case  on  the  part  of  the  plaintiff'  was,  that  he 
knew  the  fact  of  the  mortgagee's  claim ;  and  therefore  he  asked  for  an  in- 
demnity, though  he  did  not,  unfortunately  for  him,  get  an  effectual  one. 
He  paid  the  rent  as  a  thing  he  was  bound  to  pay,  indicating  no  intention 
to  reclaim  it.  There  was  no  misrepresentation  of  the  facts,  no  fraud  on 
the  part  of  the  defendant  in  receiving  the  money,  and  consequently  no 
ground  upon  which  the  plaintiff  can  be  entitled  to  recover  it  back. 

V.  Williams,  J.  I  am  of  the  same  opinion.  I  am  not  disposed  to 
throw  any  doubt  upon  the  case  of  Kelly  v.  Solari,  confirmed,  as  it  is,  by 
Bell  V.  Gardiner.  Eut  I  think  the  present  case  falls  within  the  ordinary 
rule,  that  money  paid  with  full  knowledge  of  all  the  circumstances  cannot 
be  recovered  back  in  an  action  for  money  had  and  received. 

Maule,  J.  I  am  of  the  same  opinion.  That  the  payment  was  made 
with  full  knowledge  of  all  the  facts  on  both  sides,  was,  I  think,  strongly 
evidenced  by  the  receipt  that  was  given. 

Wilde,  C.  J.     The  general  result  of  the  evidence  in  this  case,  is,  that 


SECT.  I.]  VAN  DEUSEN  V.   BLUM.  197 

the  defendant  has  received  from  the  plauitiff  a  sum  of  money  which  she 
was  not  entitled  to  receive  :  and,  in  such  a  case,  one  would  look  very  anx- 
iously to  see  if  the  law  would  not  wairant  his  recovering  it  back.  But  it 
is  of  infinitely  more  importance  that  general  principles  should  be  adhered 
to.  I  must  confess  I  can  see  no  foundation  for  the  plaintiff's  claim.  The 
recovery  back  of  money  once  parted  with,  is  always  attended  with 
difficulty. 

With  respect  to  the  evidence,  —  what  passed  with  Hodgkinsou  was  ad- 
mitted down  to  the  point  at  which  it  tended  to  prove  a  contract.  It  was 
then  objected  that  Hodgkinson  had  no  authority  from  his  client  to  enter 
into  a  contract  of  indemnity  for  her.  Upon  that,  the  question  for  my  de- 
cision was,  whether  or  not  there  was  evidence  of  any  authority  in  him  to 
contract  fur  the  defendant.     I  think  there  was  not. 

As  to  the  other  part  of  the  case,  it  was  an  extremely  simple  one.  The 
plaintiff"  is  tenant  to  the  defendant.  A  tliird  person  gives  notice  of  a  claim 
adverse  to  the  defendant,  stating  the  grounds  of  her  claim  minutely  and 
correctly,  viz.,  that  the  premises  have  been  assigned  to  her  by  way  of  mort- 
gage, and  that  the  interest  is  in  arrear.  The  landlady  insists  that  she  is 
entitled  to  the  rent.  Of  what  is  the  plaintiff"  ignorant  ]  It  does  not  appear 
that  any  misrepresentation  of  fact  was  made  by  the  defendant.  The  plain- 
tiff" yields  to  the  defendant's  claim  of  right,  and  pays  her  the  money.  It  is, 
therefore,  the  simple  case  of  a  notice  of  adverse  claims,  to  one  of  which  the 
plaintiff"  elects  to  give  the  preference.  The  case,  therefore,  clearly  falls 
within  the  general  principle,  —  that  money  paid  with  full  knowledge  of  all 
the  facts,  cannot  be  recovered  back. 

liule  refused. 


ABRAHAM  VAN   DEUSEN   et  al.  v.  JAMES   BLUM   et   al. 

In  the  Supreme  Judicial  Court  of  Massachusetts,  September  Term, 

1836. 

[Reported  in  18  Pickering,  229.] 

This  was  an  action  of  debt.  The  declaration  contained  two  counts  upon 
a  special  contract  under  seal,  a  third  upon  a  quantum  meruit  for  labor  per- 
formed, and  a  fourth  upon  a  quantum  valebant  for  materials  furnished.  The 
defendant  Blum  was  defaulted  ;  the  other  defendant,  Thouvenin,  appeared, 
and  to  the  first  two  counts  he  pleaded  non  est  factum,  and  to  the  third  and 
fourth,  nil  debet. 

At  the  trial,  before  Morton,  J.,  the  plaintiff's  produced  the  contract, 
purporting  to  be  between  themselves  of  the  one  part,  and  Blum  and 
Thouvenin  of  the  other  part.  Blum  and  Thouvenin  were  partners,  and 
were  so  described  in  tiie  contract.     The  plaintiffs  had  duly  executed  the 


198  VAN   DEUSEN   V.   BLUM.  [CHAP.  II. 

contract,  and  Blum  also  had  executed  it  by  signing  the  company  name 
"J.  C.  Thouveniu  &  Co.,"  and  annexing  a  seal.  There  was  no  evidence 
that  he  had  any  authority  to  execute  the  contract  in  behalf  of  Thouvenin, 
or  that  Thouvenin  was  present  at  the  execution  or  ever  ratified  it. 

The  judge  ruled,  that  the  instrument  could  not  go  in  evidence  to  the 
jury  as  the  deed  of  Thouvenin. 

The  contract  was  for  building  a  dam  by  the  plaintiffs  for  Blum  and 
Thouvenin,  across  the  Housatonic  River;  which  was  a  purpose  within  the 
scope  of  the  partnership  business.  The  plaintiffs  offered  to  prove  that  they 
built  the  dam  and  furnished  the  materials  therefor,  and  they  claimed 
against  Thouvenin,  under  the  third  and  fourth  counts,  what  their  work 
and  materials  were  worth.  Thouvenin  objected  to  the  admission  of  this 
evidence,  and  contended  that  there  being  an  express  contract  executed  by 
the  plaintiffs  and  Blum,  and  that  contract  being  in  force  and  binding  upon 
Blum,  the  plaintiffs'  remedy  was  on  that  instrument  alone. 

But  the  judge  ruled,  that  the  plaintiffs  might,  notwithstanding  that  con- 
tract, recover  under  the  third  and  fourth  coimts,  upon  an  implied  promise, 
for  all  the  materials  furnished  and  labor  performed  before  the  dissolution 
of  the  partnership. 

Thouvenin  and  Blum  dissolved  partnership  on  the  10th  of  November, 
1832,  and  all  the  partnership  property  was  conveyed  to  Blum,  and  he  agi-eed 
to  pay  all  the  partnership  debts.  The  dam  was  not  finished  until  after  the 
10th  of  November,  and  for  the  work  done  previously  to  that  day  the  jury 
found  a  verdict  against  Thouvenin. 

The  questions  arising  upon  these  facts  were  reserved  for  the  consideration 
of  the  whole  court. 

Dwiffht,  Byington,  and  Tucker,  for  the  defendant. 

Bishop  and  Sumner,  for  the  plaintiff. 

Morton,  J.,  delivered  the  opinion  of  the  Court.  Debt,  as  well  as  assump- 
sit, will  lie  on  a  quantum  meruit  or  a  qnwitum  valtbant}  Union  Cotton 
Manufactory  v.  Lobdell.^  Hence  these  counts  may  well  be  joined  with 
counts  upon  a  specialty.     Smith  v.  First  Congr.  Meetinghouse  in  Lowell.' 

It  was  long  doubted,  whether  a  man,  who  performed  work  in  consequence 
of  a  special  contract,  but  not  in  conformity  to  it,  could  recover  for  the 
services  rendered  and  materials  found.  There  are  many  and  conflicting 
authorities  on  the  subject.  They  have  all  been  carefully  examined  and 
compared,  and  the  rule  established  by  our  court,  as  we  think,  according  to 
the  principles  of  justice  and  the  weight  of  authority.  He  who  gains  the 
labor  and  acquires  the  property  of  another,  must  make  reasonable  compen- 
sation for  the  same.  Hay  ward  v.  Leonard  ;*  Smith  v.  First  Congr.  Meeting- 
house in  Lowell ;  ^  Munroe  v.  Perkins  ;  *  Brewer  v.  Tyringham.' 

1  1  Chit.  PI.  107  ;  2  Wms's  Saund.  117  h,  note.  ^  13  Johns.  462. 

8  8  Pick.  178.  *  7  Pick.  181.  «  8  Pick.  178. 

6  9  Pick.  298.  '  12  Pick.  .'547. 


SECT.  I.]  BOND   V.   AITKIN.  199 

The  general  authority  derived  from  the  relation  of  partnership  does  not 
empower  one  partner  to  seal  fur  the  company  or  to  bind  them  by  deed.  It 
requires  special  power  for  this  purpose.  See  Cady  v.  Shepherd/  and  the 
cases  there  cited.  Here  was  no  evidence  of  any  previous  authority  or  sub- 
sequent ratification.  The  sealed  instrument  executed  by  one  partner  in 
the  name  of  the  firm  might  bind  him,  but  could  not  be  obligatory  upon  tlie 
company.  And  although  the  plaintiffs  might  have  had  a  remedy  upon  the 
contract  against  the  party  who  executed  it,  yet  they  were  not  bound  to  rely 
upon  him  alone. 

The  services  never  were  rendered  either  in  conformity  to  or  under  such 
an  agreement.  The  plaintiffs  undertook  to  execute  a  contract  between 
themselves  and  the  company.  But  there  being  no  such  contract  in  exist- 
ence, they  are  left  to  resort  to  their  equitable  claim  for  their  labor  and 
materials.  So  far  as  these  benefited  the  company,  the  plaintiffs  are  entitled 
to  recover  against  them. 

Judgvient  on  tlie  verdict. 


BOND  V.   AITKIN. 
In  the  Supreme  Coobt  of  Pennsylvania,  December  Term,  1843. 

[Reported  in  6  Watts  ^  Sergeant,  165.] 

Error  to  the  Common  Pleas  of  Delaware  county. 

This  was  an  action  of  debt  brought  by  Charles  Bond  against  John  Aitkin 
and  James  Aitkin,  trading  under  the  firm  of  John  k  James  Aitkin,  on  the 
following  note  :  — 

Six  months  after  date  we  promise  to  pay  to  Charles  Bond  or  order  four 
hundred  dollars,  with  five  per  cent  interest,  without  defalcation,  for  value 
received.     Witness  our  hands  and  seals,  this  1st  day  of  October,  1836. 

John  tt  James  Aitkin,  [l.  s.] 

The  plaintiffs  declared  in  one  count  against  the  defendants  as  partners 
in  a  sealed  instrument  alleged  to  have  been  executed  by  them,  and  in  an- 
other against  them  as  partners  for  money  lent.  James  Aitkin  pleaded 
payment  with  leave,  etc.  and  non  est  factum,  to  the  first  count.  Judgment 
by  default  was  entered  against  John. 

The  plaintiff  called  a  witness,  who  testified  that  he  called  on  James 
Aitkin,  and  presented  to  him  the  note  in  suit  for  payment.  Witness  asked 
him  if  he  had  signed  it.  He  replied  that  he  had  not,  tliat  John  had  signed 
it ;  that  he  did  not  know  it  at  the  time,  but  if  he  had,  he  would  have  been 
perfectly  satisfied  ;  the  money  was  got  for  the  firm  and  went  into  the  firm. 
Witness  then  asked   fiim  for  his  individual  note,  which  he  refused,  saying 

1  11  Pick.  400. 


200  BOND   V.    AITKIN.  [CHAP.  II, 

he  preferred  it  should  be  sued  out  as  a  partnership  claim,  that  the  neigh- 
bors might  know  it  was  not  his  fault.  He  said  he  could  not  pay  the  amount 
of  the  note  at  that  time,  but  if  he  could  make  collections,  it  should  be  paid 
by  the  1st  of  October:  he  had  left  his  brother  to  settle  the  books  and 
thought  he  had  paid  it.  Witness  told  him  he  thought  he  would  have  to 
pay  the  note,  when  he  replied  he  thotight  the  note  as  good  as  if  he  gave 
his  individual  note.     He  admitted  that  he  and  John  had  been  partners. 

Another  witness  proved  that  the  body  of  the  note  and  signature  were  in 
the  handwriting  of  John  Aitkin.  That  the  defendants  were  in  partnership 
for  several  years,  John  being  the  active  partner.  The  partnership  was 
dissolved  about  the  year  1839.  On  the  dissolution  the  property  remained 
■with  John,  who  was  to  pay  the  debts  of  the  firm. 

Bell,  President,  charged  the  jury  as  follows  :  — 

The  plaintiff  declares  in  two  counts,  one  on  a  bill  single  alleged  to  be 
executed  by  John  and  James  Aitkin,  dated  October  1,  1836,  to  secure 
the  payment  of  $400.  To  this  the  defendant,  James  Aitkin,  pleads  non  est 
factum  ;  and  this  plea  raises  the  question  whether  the  obligation  is  in  truth 
the  deed  of  John  and  James,  as  the  plaintiff  argues.  It  appears  the  bill 
obligatory  was  signed  by  John  alone,  and  although  he  used  the  name  of 
his  partner  as  one  of  a  firm,  it  is  not  binding  on  James ;  for,  generally 
speaking,  one  partner  cannot  bind  another  by  specialty  or  instrument  un- 
der seal,  sealed  instruments  not  being  such  as  are  used  in  transacting 
partnership  affairs.  The  plaintiff  cannot,  therefore,  recover  on  his  first 
count,  for  he  has  failed  to  prove  the  bill  single  declared  on  is  the  deed  of 
the  defendants. 

But  the  plaintiff,  in  a  second  count,  declares  against  John  and  James 
Aitkin,  as  partners,  for  money  loaned  to  them.  On  the  evidence,  the  jury 
can  entertain  little  or  no  doubt  that  the  money  sought  to  be  recovered  was 
borrowed  from  the  plaintiff  on  the  partnership  account  and  applied  to  part- 
nership purposes,  and  so  became  the  joint  debt  of  both  the  partners, 
though  actually  borrowed  but  by  one  of  them.  Prima  facie,  therefore, 
both  would  be  liable  in  this  action.  But  in  answer  to  this  statement  of 
the  plaintiff's  claim,  the  defendants  set  up  the  bill  single  given  in  evidence 
by  the  plaintiff  under  his  first  count,  as  a  bar  to  his  recovery  on  the 
second.  This  bill  single  must  be  taken  as  executed  by  John  Aitkin  alone ; 
for  though  signed  in  the  name  of  the  firm,  it  is  good  against  him,  and  him 
alone.  But  it  is  the  undoubted  rule  in  Pennsylvania,  that  if  the  creditor 
of  a  firm  accept  the  obligation  of  one  of  the  partners  for  the  firm  debt, 
the  original  claim  is  merged  nnd  extinguished  in  the  new  security,  and 
the  creditor  cannot  afterwards  have  recourse  to  the  first  liability,  as  is 
attempted  here. 

But  it  is  shown  that  James  Aitkin  promised  to  pay  this  debt  subse- 
qtiently  to  the  execution  of  the  bill  single,  and  if  this  were  an  action 
against  him  alone,  I  incline  to  the  opinion  that  the  plaintiff  might  re- 


SECT.  I.]  BOND  V.   AITKIN.  201 

cover  ou  this  promise,  as  based  on  a  subsequent  consideration.  But  this 
is  an  action  against  two,  John  and  James ;  and  before  the  plaintiff  can 
recover,  he  must  show  a  joint  liabihty  on  the  part  of  the  defendants  to 
answer.  In  this  he  has  failed.  I  am,  therefore,  of  opinion  the  plaintiff  is 
not  entitled  to  recover  in  this  action,  and  your  verdict  ought  to  be  for  the 
defendants. 

The  plaintiff  excepted  to  the  charge,  and  assigned  the  following  errors :  — 

1.  The  court  erred  in  charging  that  the  bill  single  executed  by  John 
Aitkin  was  an  extinguishment  of  the  joint  debt  of  both  defendants. 

2.  In  charging  that  the  plaintiff  could  not  recover  upon  the  second  count 
of  the  declaration. 

3.  In  cliargiug  that  the  plaintiff  could  not  recover  upon  James  Aitkin's 
promise  to  pay. 

4.  In  charging  that  there  was  no  joint  liability. 

5.  In  charging  that  the  bill  single  was  void  as  to  James  Aitkin. 
Udu'ctrds  and  B.  IHlghvian  for  plaintiff  in  error. 

Leims  for  defendants  in  error. 
The  opinion  of  the  Court  was  delivered  by 

Sergeant,  J.  The  question  arising  in  this  case  has  undergone  a 
thorough  discussion  in  the  two  late  cases  of  Gram  v.  Seton,^  and  Cady 
V.  Shepherd,^  where  all  the  authorities  are  examined,  and  the  principle  ia 
settled  that  a  partner  may  bind  his  copartner  by  a  contract  under  seal, 
in  the  name  and  for  the  use  of  the  firm,  in  the  course  of  the  partnership 
business,  provided  the  copartner  assents  to  the  contract  previously  to  its 
execution,  or  afterwards  ratifies  and  adopts  it ;  and  this  assent  or  adop- 
tion may  be  by  parol.  And  we  are  satisfied  that  the  rule  is  founded  on 
principles  of  justice  and  policy,  and  supported  by  the  general  tenor  of  the 
adjudged  cases  in  this  country  and  in  England.  The  only  question  in  the 
present  case  is,  whether  there  is  any  evidence  to  go  to  the  jury  to  show 
that  James  Aitkin  assented  to  the  giving  of  the  sealed  bill  in  the  name  of 
the  firm,  before  or  at  the  time  of  its  execution,  or  afterwards  ratified  it ; 
and  we  think  there  is.  The  admissions  made  by  him  in  the  conversation 
with  Carter,  if  believed,  in  connection  with  the  fact  that  the  money  was 
got  for  the  firm  and  went  to  its  use,  are  evidence  to  go  to  the  jury.  He 
said  that  though  he  did  not  know  of  it  at  tlie  time  it  was  given,  yet,  if  he 
had,  he  would  have  been  perfectly  satisfied  ;  if  he  could  make  collections, 
he  would  pay  it  in  October.  He  repeatedly  desired  it  should  be  sued  as  a 
partnership  claim,  and  declared  tlie  note  was  as  good  as  if  he  gave  his  in- 
dividual note.  This  and  the  whole  tenor  of  the  conversation  tend  strongly 
to  the  inference  that  he  had  authorized  the  giving  of  it ;  and  we  think  the 
evidence  ought  to  have  been  left  to  the  jury  to  say  whether  such  authority 
was  given,  or  whether  tlie  defendant  8ul)sequently  ratified  the  instrument- 
On  the  additional  count,  we  think  the  plaintiff  has  not  shown  a  right  to 

»  1  Hall,  262.  '•'  11  Tick.  400. 


202  KELLEY   V.    LINDSEY.  [CHAP.  II. 

recover.  Where  the  bond  of  one  of  the  partners  is  taken  for  an  antecedent 
partnership  debt,  it  may  be  considered  either  as  payment  and  extinguish- 
ment of  such  debt,  or  only  a  collateral  security,  according  to  the  nature  of 
the  transaction  and  the  circun^stances  attending  it.  Wallace  v.  Fairraan.^ 
But  where  there  is  no  antecedent  debt,  but  the  bond  of  one  partner  is 
taken  at  the  time  money  is  loaned  to  the  partnership,  and  as  the  consid- 
eration for  loaning  the  money,  it  can  hardly  be  treated  as  a  collateral 
security.  It  must  be  considered  as  all  one  transaction,  and  the  bond  as 
the  only  security  contemplated;  unless,  perhaps,  there  were  strong  and 
positive  evidence  to  show  an  express  agreement  to  the  contrary  by  all 
parties.  If  so,  then  in  this  case  the  bond  was  the  only  debt ;  the  plaintiflF, 
if  he  recovered  at  all,  must  recover  on  it,  and  not  on  the  money  counts. 
And  as  there  was  no  implied  contract  by  both,  so  the  express  promise 
proved  was  only  by  one ;  and,  therefore,  we  are  of  opinion  the  charge  of 
the  court  below  was  correct,  that  the  plaintiflF  could  not  recover  on  the 

additional  count. 

Judgment  reversed,  and  a  venire  de  novo  awarded. 


KELLEY  V.   LINDSEY. 
In  the  Supreme  Judicial  Court  of  Massachusetts,  October  Term,  1856. 

[Reported  in  7  Grai/,  287.] 

Action  of  contract  on  a  check  payable  to  the  plaintiflF  and  signed 
"Benjamin  Lindsey,  by  George  G.  Coflfin."  There  were  also  counts  for 
money  lent,  and  for  money  had  and  received. 

At  the  trial  in  the  Court  of  Common  Pleas,  before  Morris,  J.,  the  evi- 
dence tended  to  show  "  that  Coffin  obtained  the  money  of  the  plaintiflF  for 
the  use  of  the  defendant,  and  that  it  was  applied  for  the  benefit  of  the 
defendant  in  his  business;  that  Coffin  was,  at  the  time  the  check  was 
drawn  and  dated,  the  financial  agent  and  confidential  clerk  of  the  defend- 
ant, and  had  charge  of  his  money  affiiirs,  while  the  defendant  was  en- 
gaged personally  as  editor  of  a  newspaper;  that  Coffin  had,  on  various 
occasions,  under  the  direction  and  with  the  assent  of  the  defendant,  ac- 
cepted drafts  drawn  on  the  defendant,  drawn  orders  on  tradesmen,  and 
borrowed  and  hired  money  of  various  persons  for  the  use  of  the  defendant 
and  in  the  defendant's  name,  and  given  checks,  signed  as  above,  to  the 
persons  from  whom  the  money  was  had ;  that  he  had,  for  the  defendant, 
accepted  drafts  drawn  on  the  defendant,  which  drafts  had  been  left  at  the 
banks  for  collection,  and  been  paid;  and  that  orders  upon  tradesmen, 
signed  as  above,  payable  to  operatives  in  the  defendant's  employ,   had 

1  4  Watts,  378. 


SECT.  l]  KELLEY   V.    LINDSEY.  203 

been  accepted  and  paid  by  the  drawees,  and  allowed  by  the  defendant 
iu  settlement  of  the  accounts  of  such  tradesmen." 

It  was  admitted  by  the  plaintiff  that  a  rate  of  interest,  greater  than 
was  allowed  by  law,  was  reserved  in  this  check  ;  that  a  sum  equal  to  three 
times  such  excess  should  be  deducted,  according  to  the  statute  ;  and  that 
the  check  was  in  fact  made  and  signed  six  weeks  earlier  than  its  date. 

It  did  not  appear  that  specific  authority  had  been  given  by  the  defend- 
ant to  Coffin  to  borrow  from  the  plaintitf,  or  that  express  authority  had 
been  given  to  procure  money  of  him  at  more  than  the  legal  rate  of  interest. 
But  there  was  evidence  to  show  that  on  one  occasion  the  defendant  was 
informed  by  Coffin  that  the  defendant's  funds  wex-e  insufficient  to  meet  his 
liabilities,  and  that  the  money  could  not  be  obtained  anywhere  at  the  legal 
rate. 

The  defendant  requested  the  court  to  instruct  the  jury,  "  that  if  Coffin 
borrowed  this  money  without  authority,  the  mere  fact  that  the  money  so 
borrowed  was  appropriated  to  the  payment  of  the  defendant's  notes,  or 
other  indebtedness  or  business  expenses,  would  not  authorize  the  jury  tc 
find  for  the  plaintiff  in  this  action."  ^ 

The  court  declined  to  instruct  the  jury  as  requested. 

The  jury  found  a  verdict  for  the  plaintiff,  and  the  defendant  alleged 
exceptions. 

L.  F.  Brigham  for  the  defendant. 

J.  F.  Dearborn  for  the  plaintiff. 

Dewey,  J.  The  remaining  instruction  was  objectionable,  and  should  not 
have  been  given.  If  Coffin  had  no  autht)rity  to  borrow  money  on  account 
of  the  defendant,  to  expend  in  his  business  and  to  pay  his  debts,  the  money 
advanced  for  that  purpose,  though  so  applied,  created  no  debt  against  the 
defendant.  No  one  can  thus  make  himself  a  creditor  of  another  by  the 
unsolicited  payment  of  his  debts ;  and  it  is  not  enough  to  create  a  liabilit}', 
that  the  defendant  had  the  benefit  of  the  money,  b}*  reason  of  its  being 
expended  in  his  business  or  in  the  payment  of  his  debts.  There  must  have 
been  shown  some  authority  to  make  such  advance  or  payment  of  money, 
proceeding  from  the  defendant,  in  addition  to  the  mere  fact  of  its  being 
applied  for  his  benefit,  in  order  to  charge  him  with  the  same  in  a  suit  at 
law.  For  this  reason,  the  court  are  of  opinion  that  tlie  verdict  must  be  set 
aside  and  a  Neiv  trial  had. 

1  Only  so  much  of  the  ctise  is  given  as  relates  to  this  charge.  —  Ed. 


204  DEERY  V.   HAMILTON.  [CHAP.  11. 

DEERY  V.   HAMILTON. 
In  the  Supreme  Court  of  Iowa,  June  17,  1875. 

[Reported  in  41  Iowa  Reports,  16.] 

Action  in  chancery  to  quiet  the  title  to  certain  lands.  There  was  a  decree 
granting  the  relief  prayed  for  in  the  petition.  The  facts  of  the  case  appear 
in  the  opinion.     Defendant  appeals. 

Beach  d'  Hard  for  appellant. 

H.  T.  McNulty  and  John  Deery  for  appellee. 

Beck,  J.  Catharine  Scully,  the  executrix  of  the  estate  ©f  John  Scully, 
deceased,  appointed  by  will,  borrowed  of  defendant  $3000,  which  was 
secured  by  a  conveyance  absolute  in  form,  executed  by  her  upon  the  lands 
of  the  decedent  which  are  involved  in  this  suit.  The  petition  denies  that 
defendant  acquired  any  right  under  the  deed,  and  prays  that  it  may  be 
cancelled.  Defendant  makes  no  claim  of  title  under  the  imstrument,  but 
insists  that  he  holds  a  valid  lien  thereunder  in  the  nature  of  a  mortgage, 
to  secure  the  payment  of  $.3000  and  the  interest  due  thereon.  The  evidence 
shows  that  the  executrix  borrowed  of  defendant  the  sum  of  $3000  for  the 
use  of  the  estate,  and  secured  the  same  by  an  absolute  deed.  Upon  the 
execution  of  the  instrument  defendant  advanced  $2430 ;  $570  being  re- 
tained as  interest  upon  the  $3000  for  two  years.  The  money  so  secured  by 
her  was  used  in  paying  claims  against  the  estate,  and  expenses  incurred  by 
the  executrix.  Subsequently  the  executrix  died  and  plaintiff  was  appointed 
administrator  de  bonis  nan.  He  now  insists  that  the  money  was  borrowed, 
and  the  deed  executed  without  authority  of  law.  The  defendant  claims 
that  the  transaction  is  authorized  under  the  terms  of  the  will,  and  that  it 
was  reported  to  and  approved  by  the  Circuit  Court,  in  discharge  of  its  pro- 
bate powers.  Unless  authority  is  found  therefor,  it  cannot  be  claimed  that 
the  transaction  will  bind  the  estate,  for  unless  especially  authorized  either 
by  the  will  or  the  law,  the  executrix  possessed  no  power  to  do  such  acts. 

1.  The  clause  in  the  will  which  defendant  claims  authorizes  the  borrow- 
ing of  the  money,  and  the  execution  of  the  deed  as  security,  is  as  follows  : 
"  I  direct  my  executors,  as  soon  as  shall  be  practicable  and  consistent  with 
the  interest  of  my  estate,  to  convert  all  my  property  both  real  and  personal 
into  money,  and  to  put  the  same  at  interest  on  good  and  sufficient  security 
in  a  State  or  National  Bank  in  the  city  of  Dubuque,  Iowa."  No  such  au- 
thority as  the  executrix  exercised  was  conferred  upon  her  by  this  clause  of 
the  will.  It  directs  the  conversion  of  the  property  into  money,  and  the 
loaning  thereof,  thus  providing  for  accumulations  of  money  iu  the  hands  of 
the  executor.  The  course  pursued  was  the  directly  opposite,  whereby  the 
estate  became  the  payer  of  interest  instead  of  receiving  it.     Under  the  will 


SECT.  I.]         FIRST   BAPTIST  CHURCH   OF   ERIE   V.   CAUGHEY.  205 

the  executrix  was  directed  to  sell  the  property  of  the  estate  for  money,  not 
to  borrow  money  and  pledge  real  estate  to  its  payment. 

2.  The  executrix  reported  the  fact  that  she  had  borrowed  the  money, 
with  an  account  showing  its  disbursement.  This  report  anl  the  account 
■were  presented  to  the  Circuit  Court,  and  an  indorsement  of  approval  made 
thereon.  But  this  action  of  the  court,  without  the  course  prescribed  by  the 
statute  having  been  followed  by  the  executrix,  did  not  validate  the  trans- 
action done  without  authority.  As  the  law  did  not  authorize  the  transaction 
and  prescribe  that  manner  of  converting  the  property  of  the  estate  into  money, 
the  approval  of  the  court  does  not  defeat  its  provisions.  There  is  no  statute 
authorizing  an  executor  to  borrow  mone}^  and  as  a  security,  convey  the  land 
of  the  estate.  The  course  to  be  pursued  in  selling  land  of  an  estate  is  pre- 
scribed by  statute.     The  whole  transaction  must  be  held  invalid. 

3.  The  estate  has  received  the  benefit  of  the  money  which  was  ad- 
vanced by  defendant.  It  ought  in  good  conscience  to  repay  it  with  legal 
interest.  This  is  not  required  because  of  the  contract  under  which  the 
money  was  borrowed,  which  is  invalid,  but  on  the  ground  that  the  estate 
has  had  the  benefit  of  the  money  received  from  defendant.  Therefore  the 
interest  to  be  paid  defendant  must  be  six  per  centum  per  annum,  and  not 
ten  per  centum  as  agreed  by  the  executrix.  For  the  same  rea.son  the  estate 
should  pay  as  principal  only  the  sum  originally  received,  viz.,  $2,430.  The 
judgment  of  the  Circuit  Court  is,  therefore,  Affirmed, 


FIRST    BAPTIST    CHURCH   OF    ERIE    v.    CAUGHEY    et  al. 
Administrators. 

In  the  Supreme  Court  op  Pennsylvani.\,  October  16,  1877. 

[Reported  in  85  Pennsylcania  State  Reports,  271  J 

Error  to  the  Court  of  Common  Pleas  of  Erie  County :  of  October  and 
November  term  1877,  No.  145. 

Assumpsit  by  S.  S.  Caughey  and  H.  B.  Fleming,  administrators  of  Joseph 
Neeley,  deceased,  to  recover  the  amount  unpaid,  with  interest,  on  the  fol- 
lowing note  :  — ■ 

§900.  EniE,  December  24,  1867. 

On  the  1st  day  of  February,  1869,  we  promise  to  pay,  to  the  order  of 
Joseph  Neeley,  nine  hundred  dollars  ;  it  being  for  use  of  First  Baptist 
Church.     Value  received.  W.  J.  F.  Lidoell, 

HoRACJ5  L.  White, 
James  D.  Ros.s, 
Samuel  Z.  Smith. 
Trustees  of  the  First  Baptist  Church,  Erie,  Penna. 


206  FIRST    BAPTIST   CHURCH    OF   ERIE   V.   CAUGHEY.        [CHAP.  II. 

The  remaining  facts  are  sufficiently  stated  in  the  opinion  of  this  court. 

The  defendants  resisted  the  claim  on  the  ground,  first,  that  under  the 
charter  of  the  church  the  trustees  had  no  authority  to  execute  such  an 
obligation  as  the  one  in  suit,  nor  to  borrow  money  ;  and  secondly,  that  the 
money  was  for  the  payment  of  a  note  previously  given  by  W.  J.  F.  Liddell, 
one  of  the  trustees,  to  one  Catharine  Smith,  for  money  borrowed  from  her 
by  him  individually,  and  with  which  he  paid  a  subscription  he  had  made 
towards  the  building-fund  of  the  church. 

On  part  of  the  plaintiff  it  was  contended  that,  whether  the  trustees 
had  the  right  to  bind  the  church  by  such  an  obligation,  or  not,  yet  if  the 
money  obtained  from  Mr.  Neeley  by  the  trustees  was  actually  used  in 
the  construction  of  the  church  edifice,  the  church  receiving  the  benefit  of 
the  same,  there  would  be  an  implied  obligation  to  pay,  and  plaintiff  should 
be  entitled  to  recover  under  the  general  indebitatus  assumj^sit  counts  in 
their  declaration. 

The  Court,  Galbraith,  P.  J.,  in  the  general  charge  said  :  — 

"  This  I  conceive  to  be  a  correct  position.  The  trustees  of  a  corporation 
may  not  bind  it  by  such  specialty  containing  such  stipulations  as  these, 
in  the  absence  of  some  express  authority  contained  in  the  charter ;  but 
there  are  implied  as  well  as  express  powers  incident  to  every  corporation  ; 
and  in  this  case,  if  the  jury  believe  from  the  evidence  that  the  money  for 
which  the  note  was  executed  by  the  trustees  was  used  by  them,  or  by 
other  officers  of  the  church,  in  rebuilding  the  church  building,  and  so 
went  to  the  benefit  of  the  society,  then  the  law  raises  an  implied  obligation 
in  equity  and  good  conscience,  as  well  as  in  law,  on  part  of  the  church  to  re- 
pay it,  and  the  verdict  should  be  for  plaintiff.  If,  on  the  contrary,  the  jury 
believe  from  the  evidence  that  the  money  went  to  pay  a  debt  of  W.  J.  F. 
Liddell,  one  of  the  trustees  who  signed  the  note,  the  fact  that  the  money 
for  which  the  debt  of  Liddell  was  contracted  was  paid  into  the  church 
treasury  on  a  subscription  made  by  him  individually  towards  the  building- 
fund,  would  not  relieve  the  transaction  or  change  its  character,  and  plain- 
tiff could  not  recover.  The  jury  will  decide  as  they  find  the  weight  of 
evidence  upon  this  fact,  and  give  their  verdict  accordingly." 

The  verdict  was  for  the  plaintiff,  and  after  judgment  the  defendant  took 
this  writ,  assigning  for  error  the  admission  of  the  note  in  evidence  and  the 
foregoing  charge  of  the  court. 

Allen  d;  Rosenzweig  for  plaintiff  in  error. 

James  C.  d'  F.  F.  Marshall  for  defendants  in  error. 

Mr.  Justice  Mercer  delivered  the  opinion  of  the  court,  January  7,  1878. 

All  the  assignments  of  error  may  be  answered  in  the  consideration  of 
two  questions,  —  the  one  whether  the  corporation  had  the  power  to  incur 
the  alleged  liability  ;  ^  the  other  whether  there  was  sufficient  evidence  to 
submit  to  a  jury  that  the  liability  was  actually  incurred. 

1  As  to  the  liability  of  a  corporation  in  quasi-contract  for  benefits  received  from  ultra 
vires  transactions,  see  infra. 


SECT.  I.]  FIRST   BAPTIST   CHURCH    OF   ERIE    V.    CAUGHEY.  207 

1.  The  original  charter  declares  one  of  the  objects  of  the  association  to  be 
"  the  building  of  a  meeting-house,  and  settlement  and  support  of  a  pastor 
or  minister  of  the  gospel  for  the  worship  of  Almighty  God,  and  the  religious 
instruction  of  the  congregation,  .  .  .  together  with  that  of  the  purchase 
and  tenure  of  such  lands  or  lots  as  may  be  necessary  and  convenient  for  the 
site  of  a  meeting-house,  of  a  burial-ground,  and  of  a  parsonage  house  of 
convenient  size  for  their  minister."  A  supplement  to  the  charter  gives  the 
corporation  power  to  assess  and  collect  a  tax  on  the  pews  ;  but  not  to  exceed 
in  any  one  year  twenty  per  centum  upon  a  fixed  valuation,  for  the  purpose 
of  defraying  the  expenses  of  repairs,  insurance  and  minister's  salary,  to- 
gether with  incidental  expenses.  The  charter  is  silent  on  the  subject  of 
borrowing  money. 

Some  thirty  years  after  the  corporation  was  formed,  the  church  edifice 
became  unsuitable  and  inadequate  for  the  enlarged  congregation.  It 
therefore  resolved  to  rebuild  and  enlarge  the  meeting-house.  This  required 
an  expenditure  beyond  the  sum  subscribed  by  voluntary  contributions,  for 
that  purpose.  The  meeting-house  was  rebuilt.  Had  the  corporation  power 
to  contract  a  debt  in  rebuilding  beyond  the  amount  subscribed  1  We  think 
it  had.  The  object  of  its  incorporation  could  not  be  fulfilled  without  the 
meeting-house.  Xo  clause  in  its  charter  forbid  its  contracting  a  debt  in 
the  erection  of  its  necessary  buildings.  Whether  it  hired  laborers  and 
bought  materials  on  a  credit,  or  whether  it  borrowed  money  with  which  to 
pay  for  the  labor  and  materials  when  procured,  the  liability  incurred  was 
for  the  same  purpose.  As  it  could  not  have  successfully  defended  against 
the  wages  of  a  laborer  employed  in  the  erection  of  the  house  through  want 
of  power  to  employ  him,  so  it  cannot  defend  against  the  pa3-mcnt  of  money 
borrowed  and  actually  expended  in  the  erection  of  the  church.  As  to  the 
policy  of  a  church  erecting  a  house  of  worship  far  beyond  its  available 
means,  we  do  not  now  feel  it  necessary  to  indicate  an  opinion.  Certain  it 
is,  that  the  small  sum  here  in  controversy  is  trifling  compared  with  the 
large  debts  resting  upon  many  of  the  churches  in  towns  and  in  cities. 

2.  The  charter  declared  the  business  and  affairs  of  the  association 
should  be  under  the  direction  and  management  of  five  trustees,  a  majority 
of  whom  should  constitute  a  quorum.  It  further  declared  the  trustees 
should  "  have  the  general  care,  superintendence,  and  management  of  the 
concerns  of  the  same." 

During  the  progress  of  the  work,  Mr.  LiddcU,  one  of  the  trustees,  appears 
to  have  been  the  financial  agent  and  manager,  in  behalf  of  the  board  of 
trustees.  In  raising  the  funds  necessary,  he  borrowed  $1200  from  Mrs. 
Smith,  and  gave  his  individual  note  therefor.  Subsequently  the  trustees 
borrowed  §900  of  Joseph  Neeley,  to  pay  so  much  of  the  debt  due  to  Mrs. 
Smith,  and  four  of  them  executed  and  delivered  the  note  for  the  sum  thus 
borrowed.  The  court  doubted  the  power  of  the  plaintiff  in  error  to  give 
the  note,  and  the  consequent  liability  of  the  corporation  thereon  alone  j  but 


208  FIRST   BAPTIST   CHUECH   OF  ERIE   V.   CAUGHEY.        [CIIAP.  II. 

substantially  charged  that  there  were  certain  implied  powers  incident  to 
every  corporation,  and  if  they  were  satisfied,  from  the  evidence,  that  the 
money  for  which  the  note  was  given  was  actually  used  in  rebuilding  the 
church,  and  thus  went  to  the  benefit  of  the  society,  the  law  raised  an  im- 
plied obligation  on  the  part  of  the  church  to  repay  it.  It  was  contended 
on  the  argument  that  there  was  no  evidence  that  the  money  was  used 
in  rebuilding  the  church.  The  answer  to  this  objection  is  shown  in 
several  parts  of  the  record.  The  note  itself  contains  the  written  declara- 
tion of  four  of  the  trustees  jointly,  when  engaged  in  making  the  loan, 
that  the  $900  were  "  for  use  of  First  Baptist  Church."  The  settlement 
which  Liddell  subsequently  made,  as  appears  by  the  receipt  signed  by  the 
president  of  the  board  of  trustees,  and  one  other  trustee,  declares,  "  We 
hereby  assume  all  liabilities  of  said  church  for  which  said  W.  J.  F.  Liddell 
as  trustee  has  become  responsible,  including  note  given  to  Mrs.  Catharine 
Smith,  signed  by  himself  individually,  for  the  use  of  said  church,  according 
to  settlement  made  this  day."  On  the  trial  of  the  cause,  James  Dunlap, 
president  of  the  board  of  trustees,  was  called,  by  defendants  in  error,  as  a 
witness,  and  in  his  testimony  in  chief  said,  "  in  repairing  church  had  to 
borrow  money  ;  were  advised  by  counsel  that  church  could  not  borrow  it ; 
must  be  individual ;  the  money  borrowed  from  Neeley  was  paid  to  Mrs. 
Catharine  Smith,  to  discharge  a  debt  to  her  for  money  borrowed  by  Mr. 
Liddell  for  the  church."  It  is  true,  on  cross-examination,  his  evidence  goes 
to  impair  the  validity  of  the  receipt  to  which  his  name  was  subscribed,  and 
he  further  said  "  none  of  the  Neeley  money  was  received  by  the  church." 
I  think  the  fair  interpretation  of  his  testimony  is  that  the  money  was  not 
actually  paid  into  the  hands  of  the  trustees,  but  was  paid  directly  by 
Neeley  to  Mrs.  Smith.  It  was,  howevei',  a  question  for  the  jury  to  de- 
termine. It  is  further  shown  by  the  evidence  that  the  plaintiff  in  error 
made  a  payment  of  $300  on  the  note  given  to  Neeley ;  the  indorsement 
thereof  being  in  the  handwriting  of  the  treasurer,  now  deceased,  of  the 
corporation. 

This  chain  of  evidence,  both  written  and  verbal,  tending  to  show  how 
the  business  was  conducted  and  settled,  ratified  by  a  partial  payment,  was 
certainly  sufficient  to  submit  to  the  jury  to  find  that  the  money  was  used 
in  rebuilding  the  church. 

Judgment  affirmed. 


SECT.  I.]  BILLINGS   V.    INHABITANTS   OF  MONMOUTH.  209 


GEORGE  H.   BILLINGS  v.    INHABITANTS  OF   MONMOUTH. 
In  tue  Supreme  Judicial  Court  of  Maixe,  April  6,  1881. 

[Reported  in  72  Maine  Reports,  174.] 

On  exceptions  and  motion  for  a  new  trial. 

Assumpsit  on  three  promissory  notes  signed  *'  "William  G.  Brown,  Treas- 
urer ;  "  also  for  money  had  and  received. 

Plea  was  general  issue,  and  statvite  of  limitations  was  set  up  under  a 
brief  statement. 

The  verdict  was  for  $3004.81. 

The  exceptions  relate  to  the  admission  in  evidence  of  the  notes  declared 
upon,  of  certain  other  notes,  and  of  the  records,  accounts,  and  settlements 
with  the  treasurer  of  the  defendant  town.  Exceptions  were  also  taken  to 
the  part  of  the  charge  to  the  jury  given  below  :  — 

"  Now  a  question  is  raised  here  in  the  very  beginning  whether  these 
notes  are  the  notes  of  the  town,  or  the  notes  of  the  treasurer.  I  do  not 
deem  it  necessary  to  state  in  regard  to  that  now.  I  do  not  care  to  state  it 
for  the  reason  that  there  are  several  actions  pending,  in  which  that  very 
question  will  be  raised  and  will  be  finally  settled  by  the  law  court.  And  it 
is  sufficient  for  me  to  say  to  you,  that  those  notes  were  not  authorized  by 
any  vote  of  the  town.  .  .  .  That  lays  the  notes  out  of  the  case  ; "  —  and  to 
other  parts  of  the  charge  covering  several  pages. 

G.  C.  Vose  for  the  plaintiff. 

J.  11.  Potter  for  the  defendants. 

Barrows,  J.  The  defendants'  objections  to  the  reception  in  evidence  of 
the  notes  sued,  and  certain  other  notes  and  renewals  thereof,  which  were 
claimed  by  plaintiff  in  one  phase  of  the  case  to  constitute  the  consideration 
of  the  notes  in  suit,  and  like  objections  to  the  records  of  the  doings  of  the 
town  at  various  town  meetings,  between  1862  and  1872,  and  to  the  reports 
of  the  town  treasurer  at  its  annual  meetings,  from  18G5  to  1877  inclusive, 
all  accepted  by  the  town,  and  to  the  settlements  of  the  treasurer  with  the 
selectmen,  if  said  objections  could  be  supposed  in  any  view  of  them  to  pos- 
sess merit,  became  altogether  immaterial,  when  the  presiding  judge,  with 
full  instructions  as  to  the  effect  of  a  want  of  authority  upon  the  validity  of 
the  notes,  ])eremptorily  instructed  the  jury  that  "  these  notes  were  not 
authorized  l)y  any  vote  of  the  town,  that  they  were  not  ratified,  that  there 
was  nothing  in  the  case  which  would  authorize  any  such  inference,"  and 
finally,  that  "  that  lays  the  notes  out  of  the  case,  and  brings  us  to  the 
other  count,  that  for  money  had  and  received."  ^ 

*  A  portion  of  the  opinion  relating  to  the  admissibility  of  evidence  has  been  omitted. 
—  Ed. 

U 


210  BILLINGS   V.   INHABITANTS   OF   MONMOUTH.  [CHAP.  IL 

The  defendants'  counsel  insists  in  argument  upon  the  refusal  of  the  pre- 
siding judge  to  rule  upon  the  question,  whether  tlie  notes  were  in  form 
notes  of  the  town,  or  notes  which  could  bind  the  treasurer  only.  If  the 
instructions  to  the  jury  had  permitted  a  recovery  upon  the  notes  in  any 
contingency,  that  inquiry  would  seem  to  be  pertinent.  But  they  did  not. 
The  notes  were  "  laid  out  of  the  case,"  and  the  plaintiffs  right  to  recover 
■was  made  to  depend  upon  his  establishing  what  was  necessary  to  entitle 
him  to  a  verdict  upon  the  count  for  money  had  and  received.  The 
testimony  tending  to  show  authority  or  ratihcatiou  was  weighed  and  found 
wanting.  After  this,  there  was  no  occasion  to  pass  upon  the  construction 
of  the  notes,  any  more  tliau  there  was  in  Parsons  v.  Monmouth.^ 

That  any  negotiable  paper,  made  by  the  officers  of  a  town  in  the  trans- 
action of  its  ordinary  business,  not  proceeding  under  special  authority  con- 
ferred by  some  statute,  will  be  subject,  even  in  the  hands  of  a  bona  fide 
indorsee,  to  all  equitable  defences  that  might  be  made  against  the  original 
promisee,  is  well  settled  in  this  State,  as  appears  in  the  case  last  named, 
and  the  cases  there  cited. 

And  the  plain  doctrine  of  Bessey  v.  Unity,*  and  Parsons  v.  Monmouth,  is 
that  tlie  holder  of  such  paper  who  lias  lent  money  upon  the  representation 
of  town  officers  that  it  was  wanted  for  municipal  use,  must  go  farther  and 
show  the  appropriation  of  the  money  lent  to  discharge  legitimate  expenses 
of  the  town,  unless  he  can  show  that  such  officers  were  specially  authorized, 
by  vote  of  the  town  at  a  legal  meeting,  to  effect  the  loan.  The  case  at  bar 
seems  to  have  been  tried  in  careful  conformity  with  these  rules.  The 
fallacy  of  the  greater  part  of  the  defendants'  argument  upon  the  exceptions 
consists  in  ignoring  the  fact  that  "  the  notes  were  laid  out  of  the  case." 

It  is  strongly  implied  in  the  two  cases  last  above  cited  that  money  thus 
advanced  and  shown  to  have  been  actually  appropriated  to  the  discharge  of 
legal  liabilities  of  the  town,  would  be  held  recoverable  in  an  action  for 
money  had  and  received  against  the  town.  We  see  no  good  reason  to  ex- 
cuse the  town  from  refunding  it  when  it  has  been  actually  thus  appropii- 
ated.  The  plaintiff  by  such  proof  brings  his  case  fully  within  the  principles 
that  govern  the  action  for  money  had  and  received.  He  shows  his  money 
received  and  appropriated  by  the  agents  of  the  town  to  the  legitimate  use 
of  the  town,  and  in  such  case  the  want  of  an  express  promise  to  repay  it 
will  not  defeat  the  action.  The  law  will  imply  a  promise,  sometimes,  even 
against  the  denial  and  protestation  of  the  defendant.     Howe  v.  Clancey.' 

It  is  the  payment  of  the  lawful  debts  of  the  town  by  its  own  agents  with 
the  plaintiff's  money  which  constitutes  the  cause  of  action. 

To  allow  a  recovery  by  the  plaintiff  of  whatever  sum  he  can  show  has 
thus  inured  to  the  benefit  of  the  town,  is  a  more  compendious  mode  of 
settling  the  controversy  than  the  English  method  of  subrogating  the  lender 
of  the  money  to  the  rights  of  the  perhaps  numerous  corporation  creditors, 

1  70  Me.  264.  «  65  Me.  342.  »  53  Me.  130. 


SECT.  I.]  BILLINGS   V.   INHABITANTS   OF   JIONMOUTH.  211 

who  have  been  paid  with  the  funds  procured  without  authority,  —  a  mode  of 
doing  justice  which  manifestly  tends  to  a  multiplicity  of  suits,  when,  for 
aught  we  see,  the  proper  result  may  be  reached,  at  all  events  with  the 
assistance  of  an  auditor,  in  a  single  action. 

Looking  at  the  issue  which  was  in  fact  presented  to  the  jury,  it  will  be 
seen  that  defendants'  counsel  is  in  error  in  supposing  that  if  the  presiding 
judge  had  ruled  that  if  the  notes  were  in  form  the  individual  notes  of 
Brown,  "  that  would  have  ended  the  conflict  and  the  plaintiff  would  have 
been  nonsuited." 

The  plaintiff  offered  testimony  tending  to  put  his  case  upon  another  foot- 
ing than  that  of  Parsons  v.  Monmouth,  and  hence  all  the  evidence  which 
had  a  tendency  to  show  that  plaintiff's  money  was  used  for  the  payment 
of  some  legitimate  iudebtment  of  the  town  was  strictly  relevant ;  and  the 
instructions  (of  some  of  which  the  defendants  complain)  were  appropriate 
to  direct  the  attention  of  the  jury  to  that  which  was  the  chief  subject  of 
inquiry.  Thus  it  is  obvious  that  the  deficiency  in  the  town  treasurer's 
accounts  was  of  importance  only  upon  the  question,  what  was  done  with 
the  plaintiff's  money,  and  as  it  might  bear  upon  that  question,  the  presid- 
ing judge  called  the  attention  of  the  jury  to  it.  The  defendants  surely 
have  no  cause  of  complaint  that  he  did  so,  nor  that  he  required  the  jury 
carefully  to  ascertain  such  facts  as  were  necessary  to  determine  whether  th& 
old  notes  which  (it  was  claimed)  were  paid  with  this  money  were  barred  by 
the  statute  of  limitations,  and  whether,  if  the  plaintiff's  money  was  paid  to 
discharge  them,  they  represented  not  only  just  but  legal  claims  against  the 
town. 

The  vital  question  of  fact,  whether  the  plaintiff's  money  had  actually 
been  applied  by  the  town  officers  to  the  extinguishment  of  legal  claims 
against  the  town,  was  settled  by  the  jury  against  the  defendants.  The  jury 
found  that  it  was  so  applied.  The  testimony  produced  by  the  plaintiff,  if 
believed,  justified  the  finding,  and  there  is  nothing  in  its  character  or  in 
that  of  the  accounts  produced  which  decisively  stamps  it  as  untrue.  There 
is  an  apparent  error  of  a  few  dollars  in  the  reckoning  of  interest.  Wheu 
the  plaintiff  has  cured  this  by  a  remittitur,  the  entry  will  be 

Motion  and  exceptions  overruled, 

Appleton,  C.  J.,  Waltok,  Virgin,  Libbey,  and  Symonds,  JJ.,  con- 
curred.^ 

^  In  recent  cases  in  this  State  it  has  been  held,  that  when  selectmen  have  acted  with- 
out special  autlioiity  in  procuring  loans  of  money  for  municipal  jmrposcs,  if  tlio  lender 
would  recover  in  an  action  of  as.sum[).sit  against  the  town  tlie  an^iunt  of  the  loans,  ho 
must  jirove  not  only  that  the  money  was  received  by  the  selectmen  in  their  ollicial  capac- 
ity but  also  that  it  was  a|ipli('d  by  tiicni  to  the  use  for  which  it  was  obtained,  to  meet 
and  discharge  existing  municiiial  liul)ilities  ;  that  towns  themselves  by  the  statutes  or- 
ganizing  them  are  strictly  limited  in  the  exercise  of  the  jiowers  of  borrowing  and  appro- 
priating money;  that  selectmen  do  not  jiossess  by  virtue  of  their  office  a  general  autliority 
to  hire  money  \\\Hm  the  credit  of  the  town;  that  some  action  of  the  town,  the  body  cor- 


212  PRICE   V.   NEAL.  [CHAP.  IX 

(c.)   Mistake  may  he  as  to  the  Validity  or  Amount  of  a  ClaimA 

PRICE   V.  NEAL, 
In  the  King's  Bench,  November  16,  1762, 

[Reported  in  3  Burrow,  1354.] 

This  was  a  special  case  reserved  at  the  sittings  at  Guildhall,  after  Trinity 
term,  1762,  before  Lord  Mansfield. 

It  was  an  action  upon  the  case  brought  by  Price  against  Neal,  wherein 
Price  declares  that  the  defendant  Edward  Neal  was  indebted  to  him  in  £80 
for  money  had  and  received  to  his  the  plaintiff's  use ;  and  damages  were 
laid  to  £100.     The  general  issue  was  pleaded,  and  issue  joined  tliereon. 

It  was  proved  at  the  trial,  that  a  bill  was  drawn  as  follows  :  — 

"Leicester,  22d  November,  1760.  Sir,  six  weeks  after  date  pay  Mr, 
Rogers  Ruding  or  order  forty  pounds,  value  received,  for  Mr.  Thomas 
Poughfor;  as  advised  by,  Sir,  your  humble  servant,  Benjamin  Sutton.  To 
Mr.  John  Price  in  Bush-laue,  Cannon-street,  London."  Indorsed  "  R.  Rud- 
ing, Antony  Topham,  Hammond,  and  Laroche.  Received  the  contents, 
James  Watson  and  Son;  witness  Edward  Neal." 

That  this  bill  was  indorsed  to  the  defendant  for  a  valuable  consideration, 
and  notice  of  the  bill  left  at  the  plaintiff's  house,  on  the  day  it  became 
due.  Whereupon  the  plaintiff  sent  his  servant  to  call  on  the  defendant, 
to  pay  him  the  said  sum  of  £40  and  take  up  the  said  bill ;  which  was  done 
accordingly. 

That  another  bill  was  drawn  as  follows  :  — 

"Leicester,  1st  February,  1761.  Sir,  six  weeks  after  date  pay  Mr.  Rogers 
Ruding  or  order  forty  pounds,  value  received,  for  Mr,  Thomas  Ploughfor.; 
as  advised  by,  Sir,  your  humble  servant,  Benjamin  Sutton.  To  Mr.  John 
Price  in  Bush-lane,  Cannon-street,  London."  That  this  bill  was  indorsed, 
"  R.  Ruding,  Thomas  Watson  and  Son.  Witness  for  Smith,  Right  and  Co." 
That  the  plaintiff  accepted  this  bill,  by  writing  on  it,  "Accepted  John 
Price  ; "  and  that  the  plaintiff  wrote  on  the  back  of  it :  "  Messieurs  Freame 
and  Barclay,  pray  pay  forty  pounds  for  John  Price." 

That  this  bill  being  so  accepted  was  indorsed  to  the  defendant  for  a 

porate,  within  the  scope  of  its  corporate  powers,  is  required  to  confer  prior  authorit}'  to 
borrow  money  in  its  name;  and  if  a  liability  is  alleged  on  the  ground  that  the  plaintiff's 
loan  was  one  the  municipality  had  a  legal  right  to  procure,  and  that,  thougli  its  officers 
did  not  act  with  authority  at  the  time,  it  has  subsequently  availed  itself  of  the  money 
loaned  by  accepting  its  application  to  the  payment. of  municipal  debts,  it  is  for  the  plain- 
tiff  to  prove  the  facts  which  support  the  allegation.  Symonds,  J.,  in  Lincoln  v.  Stock- 
ton, 75  Me.  141,  144.  —Ed. 

^  The  chronological  arrangement  of  cases  has  been  departed  from  to  some  extent  in 
this  subdivision,  — 'Ed. 


SECT.  I.]  PRICE   V.   NEAL.  213 

valuable  consideration,  and  left  at  his  bankers  for  payment ;  and  was  paid 
by  order  of  the  plaintiff,  and  taken  up. 

Both  these  bills  were  forged  by  one  Lee,  who  has  been  since  hanged  for 
forgery. 

The  defendant  Neal  acted  innocently  and  bona  fide,  without  the  least 
privity  or  suspicion  of  the  said  forgeries  or  of  either  of  them ;  and  paid 
the  whole  value  of  those  bills. 

The  jury  found  a  verdict  for  the  plaintiff,  and  assessed  damages  £80  and 
costs  405.,  subject  to  the  opinion  of  the  court  upon  this  question,  — 

"Whether  the  plaintiff,  under  the  circumstances  of  this  case,  can  recover 
back  from  the  defendant  the  money  he  paid  on  the  said  bills,  or  either  of 
them." 

Mr.  Stance,  for  the  plaintiff,  argued  that  he  ought  to  recover  back  the 
money,  in  this  action,  as  it  was  paid  by  him  by  mistake  only,  on  supposition 
"  that  these  were  true  genuine  bills ;  "  and  as  he  could  never  recover  it 
against  the  drawer,  because  in  fact  no  drawer  exists;  nor  agaiust  the  forger, 
because  he  is  hanged. 

He  owned  that  in  a  case  at  Guildhall,  of  Jenys  v.  Fawler  et  al}  (an  action 
by  an  indorsee  of  a  bill  of  exchange  brought  against  the  acceptor).  Lord 
Raymond  would  not  admit  the  defendants  to  prove  it  a  forged  bill,  by  call- 
ing persons  acquainted  with  the  hand  of  the  drawer  to  swear  "  that  they 
believed  it  not  to  be  so  ; "  and  he  even  strongly  inclined,  "  that  actual 
proof  of  forgery  would  not  excuse  the  defendants  against  their  own  accept- 
ance, which  had  given  the  bill  a  credit  to  the  indorsee." 

But  he  urged,  that  in  the  case  now  before  the  court  the  forgery  of  the 
bill  does  not  rest  in  belief  and  opinion  only,  but  has  been  actually  proved, 
and  the  forger  executed  for  it. 

Thus  it  stands  even  upon  the  accepted  bill.  But  the  plaintiff's  case  is 
much  stronger  upon  the  other  bill  which  was  not  accepted.  It  is  not  stated 
"  that  that  bill  was  accepted  before  it  was  negotiated  ; "  on  the  contrary, 
the  consideration  for  it  was  paid  hy  the  defendant  before  the  plaintiff  had 
seen  it.  So  that  the  defendant  took  it  upon  the  credit  of  the  indorsers, 
not  upon  the  credit  of  the  plaintiff;  and  therefore  the  reason,  upon  which 
Lord  Raymond  grounds  his  inclination  to  be  of  opinion  "that  actual  proof 
of  forgery  would  be  no  excuse,"  will  not  hold  here. 

Mr.  Yates,  for  the  defendant,  argued  that  the  plaintiff  was  not  entitled 
to  recover  back  this  money  from  the  defendant. 

He  denied  it  to  be  a  payment  by  mi.stake,  and  insisted  that  it  was  rather 
owing -to  the  negligence  of  the  plaintiff,  who  should  have  inquired  and 
satisfied  himself,  "  whether  the  bill  was  really  drawn  upon  him  by  Sutton, 
or  not."  Here  is  no  fraud  in  the  defendant,  who  is  stated  "to  have  acted 
innocently  and  bona  fide,  without  the  least  ])rivity  or  suspicion  of  the 
forgery ;  and  to  have  paid  the  wliolc  value  for  the  bills." 

>  2  .^fr.  010. 


214  SMITH  V.   MERCER.  [CHAP.  II. 

Lord  Mansfield  stopt  him  from  going  on,  saying  that  this  was  one  of 
those  cases  that  could  never  be  made  plainer  by  argnment. 

It  is  an  action  upon  the  case  for  money  had  and  received  to  the  plaintiff's 
use.  In  which  action,  the  plaintiff  cannot  recover  the  money,  unless  it  be 
against  conscience  in  the  defendant  to  retain  it ;  and  great  liberality  is  always 
allowed  in  this  sort  of  action. 

But  it  can  never  be  thought  unconscientious  in  the  defendant,  to  retain 
this  money,  when  he  has  once  received  it  upon  a  bill  of  exchange  indorsed 
to  him  for  a  fair  and  valuable  consideration,  which  he  had  bona  fide  paid 
without  the  least  privity  or  suspicion  of  any  forgery. 

Here  was  no  fraud ;  no  wrong.  It  was  incumbent  upon  the  plaintiff  to 
be  satisfied  "that  the  bill  drawn  upon  him  was  the  drawer's  hand,"  before 
he  accepted  or  paid  it ;  ^  but  it  was  not  incumbent  upon  the  defenlant  to 
inquire  into  it.  Here  was  notice  given  by  the  defendant  to  the  plaintiff  of 
a  bill  drawn  upon  him,  and  he  sends  his  servant  to  pay  it  and  take  it  up. 
The  other  bill  he  actually  accepts;  after  which  acjeptance,  the  defendant 
innocently  and  bona  fide  discounts  it.  The  plaintiff  lies  by  for  a  considera- 
ble time  after  he  has  paid  these  bills,  and  then  found  out  "  that  they  were 
forged ; "  and  the  forger  comes  to  be  hanged.  He  made  no  objection  to 
them,  at  the  time  of  paying  them.  Whatever  neglect  there  was,  was  on 
his  side.  The  defendant  had  actual  encouragement  from  the  plaintiff  him- 
self, for  negotiating  the  second  bill,  from  the  plaintiff's  having  without  any 
scruple  or  hesitation  paid  the  first ;  and  he  paid  the  whole  value  bona  fide. 
It  is  a  misfortune  which  has  happened  without  the  defendant's  fault  or 
neglect.  If  there  was  no  neglect  in  the  plaintiff,  yet  there  is  no  reason  to 
throw  off  the  loss  from  one  innocent  man  upon  another  innocent  man ;  but, 
in  this  case,  if  there  was  any  fault  or  negligence  in  any  one,  it  certainly 
was  in  the  plaintiff,  and  not  in  the  defendant. 

Rule ;  that  the  postea  be  delivered  to  the  defendant. 


SMITH  V.  MERCER. 
In  the  Common  Pleas,  February  13,  1815. 

[Reported  in  6  Taunton,  76.] 

Assumpsit  for  money  had  and  received,  and  on  the  other  money  counts. 
At  the  sittings  in  London  afttr  Michaelmas  term,  1814,  before  Gibbs,  C.  J., 
a  verdict  was  found  for  the  plaintiffs  for  £120,  subject  to  a  case:  The 
plaintiffs  were  bankers  in  London,  with  whom  Maurice  Evans  kept  cash ; 
the  defendants  were  bankers  at  Tunbridge,  and  were  bona  fide  holders,  for 
a  valuable  considerntion,  paid  by  them  to  Peter  Le  Souef,  of  a  bill  of  ex- 
change, drawn  on  15th  Feb.,  1811,  by  Thomas  Temple,  at  65  days'  date,  on 

J  Conf.  Wilkinson  v.  Lutwidge,  1  Str.  648.  —  Eu. 


SECT.  I.]  SMITH    V.   MERGER.  215 

Maurice  Ev.ins,  fur  £120,  payable  to  the  drawer's  order,  and  indorsed  by- 
Temple  and  P.  Le  Souef.  The  bill,  when  it  came  to  the  defendant's  hands, 
appeared  to  be  thus  accepted  :  "  Smith,  Payne,  &  Smiths,  Maurice  Evans." 
'J'his  acceptance  was  forged.  Before  the  bill  was  due,  the  defendants  in- 
dorsed the  same,  and  sent  it  with  their  indorsement  thereon  to  their  cor- 
responding bankers  and  agents  in  London,  Spooner  &  Co.,  to  be  received 
for  them  at  maturity.  Upon  the  bill  being  presented  by  Spooner  &  Co. 
to  the  plaintiffs  for  payment  on  the  23d  of  April,  when  it  became  duo,  they 
immediately  paid  the  amount  to  Spooner  &  Co.,  who  paid  the  amount  in 
account  to  the  defendants;  all  the  parties  being  at  the  time  equally  ignorant 
of  the  forgery.  The  plaintiffs  sent  the  bill  to  Evans  at  the  usual  time, 
with  the  other  vouchers  of  payments  made  for  him,  and  Evans  immediately 
returned  the  same  to  them  as  forged,  and  refused  to  allow  the  payment 
thereof  as  a  payment  made  on  his  account.  The  plaintiffs,  upon  discovering 
the  forgery,  on  the  30th  of  April,  1814,  gave  notice  to  the  defendants  that 
tlie  acceptance  was  forged,  and  required  the  defendants  to  repay  the  money, 
which  they  refused  to  do. 

Zens,  Serjt.,  for  the  plaintiffs. 

Best,  Serjt.,  for  the  defendants. 

On  this  day  the  Court  delivered  their  opinions  seriatim. 

Dallas,  J.,  recapitulated  the  facts  of  the  case,  after  which  he  thus  pro- 
ceeded. It  is  stated  in  the  case  that  all  the  parties  at  the  time  of  payment 
of  the  bill  were  equally  ignorant  of  the  forgery  ;  and  the  question  is,  on 
whom  the  loss  ought  to  fall  1  And  though  the  facts  are  not  precisely  the 
same,  I  think  the  case  of  Price  v.  Neal '  furnishes  a  rule  which  ought  to 
govern  the  present.  The  case  of  Price  v.  Neal  was  in  substance  this  :  Two 
bills  had  been  drawn,  the  first  was  only  presented  when  due;  the  second, 
drawn  some  time  after  the  first,  was  accepted,  and  paid  when  due.  Both 
proved  to  be  forgeries  as  to  the  handwriting  of  the  drawer;  and  the  plain- 
tiff, who  had  paid  them,  contended,  that  liaving  paid  by  mistake  he  was 
entitled  to  recover  back  the  money  from  the  indorsee,  who  was  an  iimoccnt 
and  bona  fide  holder.  As  to  the  facts  of  this  case,  it  may  be  necessarj'  to 
distinguish,  before  adverting  to  the  judgment  of  the  court.  The  first  bill 
had  not  derived  additional  credit  from  the  acceptance,  for  it  had  not  been 
accepted ;  but  the  second  bill  had  been  accepted,  and  was  therefore  different 
in  this  respect.  The  action  was  brought  to  recover  back  the  amount  of 
both  bills.  For  the  plaintiff,  the  argument  at  the  bar  proceeded  on  the 
ground  of  payment  by  mistake ;  but  the  first  bill  was  said  to  stand  upon 
ground  even  stronger  than  the  second,  inasmuch  as  when  negotiated  it  had 
not  been  accepted,  and  therefore  was  not  taken  upon  the  credit  of  the 
acceptor.  In  the  judgment  of  the  court  the  two  bills  are  also  distinguished, 
V»\it  the  distinction  does  not  lead  to  any  difference  of  conclusion ;  for  the 
defendant  was  adjudged  to  retain  as  to  both,  and,  as  it  seems,  parti v  on  two 
1  3  Burr.  1354,  and  1  Bl.  390. 


216  SMITH  V.   MERCER.  [CHAP.  II. 

grounds;  1st,  of  neglect  in  the  plaintiff;  2dly,  that  supposing  no  neglect, 
the  loss  ought  not  to  be  shifted  from  one  innocent  man  upon  another.  With 
the  latter  ground  I  shall  not  interfere  upon  the  present  occasion,  for  the 
former  goes  the  whole  length  of  reaching  this  case.  And  to  see  that  it 
does  it  is  only  necessary  to  ask,  what  was  the  neglect  1  The  answer  must 
be,  the  having  paid  when  due  caution  would  have  prevented  such  payment. 
If  an  acceptor  is  then  bound  to  know  the  drawer's  handwriting,  is  it  less 
the  duty  of  a  banker  to  know  the  handwriting  of  his  customer"?  In  degree, 
it  is  more  so ;  for  he  sees  it,  probably  every  day.  I  consider  therefore  the 
payment  of  this  bill  as  a  want  of  due  caution  on  the  part  of  the  plaintiffs. 
But  to  distinguish  it  from  Price  v.  Ncal,  it  is  said,  payment  by  the  bankers, 
after  it  became  due,  did  not  add  to  its  cx'edit  or  negotiability ;  so  it  was 
with  the  first  bill  in  the  case  of  Price  v.  Neal ;  yet  this  made  no  difference. 
Is  it  however  productive  of  no  injury  to  any  of  the  parties  on  the  bill] 
Suppose  Smith  &  Co.  had  not  paid  it,  it  would  have  been  immediately 
returned  to  Spooner,  and  by  him  to  Le  Souef  the  indorser,  and  it  might  have 
been  recovered,  or  put  in  suit.  But  the  effect  of  the  delay  has  been  to 
give  him  an  extended  credit ;  and  how  am  I  able  to  say  that  his  situation 
in  the  intermediate  time  may  not  have  undergone  such  a  change,  as  to 
render  him  incapable  of  paying  what  he  could  have  paid  upon  proper  notice 
and  demand.  IS^or  do  I  think  it  will  be  an  answer,  to  observe  that  nothing 
of  this  sort  is  stated  in  the  case;  for  the  plaintiffs  had  no  right  to  cast  upon 
the  defendants  the  burthen  of  such  proof,  which,  in  point  of  law,  if  the 
fact  had  existed  and  could  have  made  any  difference,  it  was  for  themselves 
to  produce.  The  ground,  therefore,  on  which  I  rest  my  opinion,  and  to 
which  I  wish  to  confine  it,  is  the  want  of  due  caution  in  having  paid  the 
bill,  the  effect  of  which  has  been  to  give  time  to  different  parties,  which 
the  plaintiffs  were  not  authorized  to  do. 

Chambre,  J.  I  think  the  plaintiffs  are  in  this  case  entitled  to  recover. 
The  bill  appears  drawn  in  the  name  of  Thomas  Temple,  payable  to  himself 
or  order,  directed  to  Maurice  Evans,  and  indorsed  by  Temple.  The  next  in- 
dorser is  Peter  Le  Souef,  and  it  appears  that  the  bill  had  the  forged  accept- 
ance on  it  when  it  was  in  his  hands,  and  in  that  state  he  indorsed  it,  and 
the  defendants  received  it  from  him  for  a  valuable  consideration,  bona  fide 
paid  to  him  by  the  defendants.  The  forged  acceptance  purported  to  make 
the  bill  payable  at  the  plaintiffs',  who  were  the  bankers  of  the  supposed 
acceptor  in  London.  The  defendants,  in  order  to  receive  the  money  for 
which  the  bill  was  given,  indorsed  it,  and  sent  it  to  their  bankers  in  town, 
who  sent  it  to  the  plaintiffs,  and  they  immediately  paid  it,  under  the  sup- 
position that  they  were  directed  so  to  do  by  Evans.  At  what  particular 
period  the  forgery  was  committed,  and  who  was  then  the  holder  of  the  bill, 
is  not  stated  ;  but  it  is  stated  that  the  parties  at  the  time,  meaning,  I  sup- 
pose, the  plaintiffs,  the  defendants,  and  their  bankers,  were  equally  ignorant 
of  the  forgery.     About  a  week  afterwards,  the  plaintiffs  sent  the  bill  as  a 


SECT.  I.]  SMITH   V.   MERCER.  217 

voucher  to  Evans,  and  he,  finding  out  the  forgery,  refused  to  allow  the 
payment,  and  sent  back  the  bill  to  the  plaintiffs.  The  pluintifts  then  gave 
the  defendants  notice  that  the  acceptance  was  forged,  and  required  the 
money  to  be  repaid.  Upon  these  facts  the  present  action  is  brought,  and 
it  is  brought  on  the  general  principle  that  when  money  not  really  due  is 
paid  bv  mistake,  it  is  recoverable  in  this  form  of  action.  In  this  case  the 
money  has  been  paid  without  any  consideration,  and  under  a  mistake ;  and 
not  only  under  a  mistake,  but  under  a  representation  made  to  the  plaintiffs 
by  the  defendants,  who  indorsed  the  bill  with  that  forged  acceptance  on  it, 
that  the  plaintiffs  were  required  and  directed  so  to  pay  it,  by  the  pci-son 
whose  agents  they  were  in  money  transactions.  Cases  undoubtedly  may 
exist  that  form  exceptions  to  the  general  rule.  Such  are  cases  respecting 
bills  of  exchange,  under  circumstances  wherein  the  doctrine  might  produce 
injurious  consequences  in  that  species  of  negotiation,  and  particularly  where 
the  party  claiming  restitution  has  himself,  though  innocently,  given  credit 
to  the  instrument  by  his  own  previous  acceptance  or  indorsement.  There 
the  party  who  wants  to  recover  back  his  money  has  himself  giveo  a  kind 
of  warranty  to  subsequent  takers,  and  will  not  be  permitted  to  recover 
against  those  who  have  innocently  received  the  money  claimed  to  be  due 
ou  such  bills.  The  case  of  Jenys  v.  Fawler  *  is  alluded  to  both  in  Black- 
stone's  and  BuiTow's  reports  of  Price  v.  Neal.  That  was  a  case  where  the 
acceptor  was  not  permitted  to  prove  the  forgery  of  the  bill  he  had  accepted, 
for  the  reason  given  by  Lord  Raymond,  C.  J.,  that  it  would  be  dangerous 
to  negotiable  notes.  Blackstone  says,  the  demand  on  the  accepted  bill  in 
Price  V.  Ncal,  was,  on  the  authority  of  that  case,  given  up  by  the  plaintifi's 
counsel,  and  I  cannot  well  understand  why  the  reasons  which  relate  thereto 
are  introduced  into  the  consideration  of  the  court  on  the  other  bill  in  Price 
V.  Neal ;  but  the  other  part  of  that  case,  which  relates  to  the  bill  not  ac- 
cepted, was  there  the  subject  of  the  decision  of  the  court,  and  is  relied  on 
in  the  present  ca.se,  as  an  authority  for  the  defendants.  Blackstone,  J., 
has  in  his  report  rather  jumbled  together  the  observations  applicable  to  tlie 
case  on  one  of  the  bills  with  those  applicable  only  to  the  other.  Among 
other  things,  the  acceptance  is  relied  on  as  ap[)licable  to  both.  All  tliat  he 
makes  the  court  say  respecting  the  unaccepted  bill,  is,  "The  negligence  in 
the  plaintiff  (who  had  taken  up  the  forged  bill),  is  greater  than  can  possibly 
be  imputed  to  the  defendant."  That  is  a  singular  subject  of  calculation. 
He  says,  "  where  the  loss  has  fallen,  there  it  must  lie  ;  one  innocent  man 
must  not  relieve  himself  by  throwing  it  on  another."  So  I  should  say  here. 
The  defendants  have  paid  their  money  for  that  which  is  of  no  value ;  they 
have  thereby  sustained  a  loss,  and  they  ought  not  be  permitted  to  throw 
that  loss  upon  another  innocent  man,  who  has  done  no  act  to  mislead  them  ; 
and  still  less  ought  tlicy  to  bo  so  permitted,  where,  instead  of  b(Mng  misled 
by  any  act  of  the  plaintiffs,  thoy  themselves  have  given  the  appearance  of 

1  2  Str.  946. 


218  SMITH   V.    MERCER.  [CHAP.  II. 

authenticity  to  the  instrument  by  their  own  indorsement,  which  was  a  sort 
of  warranty  of  its  genuineness  at  a  time  when  the  forged  acceptance  made 
a  part  of  the  instrument.  The  report  of  the  case  in  Burr,  is  fuller.  It 
speaks  of  the  liberality  of  the  action  for  money  had  and  received,  and  puts 
the  case  upon  the  ground  that  the  defendant  might  conscientiously  retain 
the  money,  not  because  it  was  his,  but  because  he  has  hold  of  it  without 
any  fraudulent  iutent.  How  he  can  satisfy  his  conscience  by  keeping  that 
which  is  not  his,  I  cannot  tell,  but  it  is  better  not  to  encourage  too  far  this 
latitude  of  conscience.  The  matter  however  has  been  lately  discussed  and 
decided  in  this  court  in  the  two  cases  of  Jones  v.  Ryde  and  Bruce  v.  Bruce. 
(Here  the  learned  judge  stated  the  case  of  Jones  v.  Ryde.)  A  great  part 
of  the  doctrine  of  Price  v.  Neal  seems  in  that  case  to  be  wholly  repudiated 
by  the  court.  Fenn  v.  Harrison  ^  was  there  cited,  and  my  Lord  Chief  Jus- 
tice says,  "  It  is  true  that  if  he  who  negotiates  a  bill  does  not  indorse  it, 
he  does  not  subject  himself  to  that  responsibility  which  the  indorsement 
would  bring  on  him,  viz.,  to  an  action  to  be  brought  against  him  as  indorser, 
but  he  does  not  get  rid  of  that  responsibility  which  arises  from  his  passing 
off  an  instrument  of  no  value,  and  receiving  value  for  it ;  "  and  he  compared 
it  to  the  case  of  paying  away  forged  bank  notes.  My  Brother  Heath  there 
adverts  to  what  is  said  by  Lord  Kenyon,  that  the  person  paying  under  such 
circumstances  is  entitled  to  recover  back  the  money,  and  he  refers  to  Cripps 
V.  Reade;^  and  my  Brother  Dallas  refers  to  the  same  case,  and  concurs 
\pith  the  rest  of  the  court.  Bruce  v.  Bruce  is  a  still  stronger  case.  There 
the  bill  was  actually  paid,  but  the  court  said  they  could  not  distinguish  it 
from  the  case  before  decided.  It  is  said  in  this  case  the  negligence  varies 
it ;  what  was  the  negligence  ]  How  perfect  the  forgery  was,  we  do  not 
know.  Some  forgeries  will  deceive  the  part}'  whose  name  is  forged.  I)id 
the  plaintiffs  omit  an}'  degree  of  reasonable  diligence  which  lay  within  their 
power?  Evans,  when  the  bill  was  sent  to  him,  could  not  be  deceived  ;  he 
must  know ;  he  detected  the  forgery,  and  gave  immediate  notice ;  whore 
then  is  the  negligence  ?  The  bill  had  done  its  office,  had  ceased  to  be  ne- 
gotiated. It  is  not  like  bills  which  have  to  go  further  in  circulation.  I 
cannot  therefore  think  this  was  a  case  of  gi'oss  negligence  in  the  plaintiffs. 
The  situation  of  the  plaintiffs  is  extremely  material.  They  are  no  parties 
to  this  bill,  neither  drawers,  acceptors,  or  payees.  They  are  not  purchasers 
of  the  bill ;  they  never  had  any  property  in  it ;  they  are  mere  servants  and 
agents  of  the  payees ;  it  is,  as  to  them,  a  payment  under  a  supposed 
authority,  which  docs  not  exist.  It  falls  within  the  general  principle.  My 
opinion  therefore  is,  that  the  plaintiffs  are  entitled  to  recover. 

Heath,  J.     I  am  of  opinion  that  a  nonsuit  ought  to  be  entered.     I  agree 

that  this  is  a  case  of  money  paid  without  consideration,  and  I  agree  in  the 

general  principle,  that  money  paid  without  consideration  upon  an  instrument 

which  proves  to  be  of  no  value,  may  be  recovered  back ;   but  there  are 

1  3  T.  R.  757.  2  6  t.  R.  606. 


SECT.  I.]  SMITH   V.    MERCER.  219 

particular  circumstances  in  this  case  which  materially  alter,  and  take  this 
case  out  of  the  general  principle.  If  Evans  had  paid  the  bill,  it  is  clear 
he  would  have  been  bound.  Can  an  agent  be  in  a  better  situation  than 
his  principal  ■?  As  between  Evans  and  the  agent,  it  may  be  a  question 
whether  the  latter  kept  within  the  scope  of  his  authority ;  but  as  to  the 
rest  of  the  world,  it  is  the  same  thing  whether  it  be  the  act  of  Evans  or  if 
his  agent.  It  would  be  strange,  if  in  an  action  by  Evans  himself  he  ought 
to  be  nonsuited,  and  that  if  the  action  be  by  the  agent,  he  should  recover. 
The  situation  of  bankers  is  most  peculiar;  they  are  bound  to  know  the 
handwriting  of  their  customers.  If  the  law  were  otherwise,  merchants 
making  their  bills  payable  at  their  bankers  would  have  this  extraordiuary 
advantage,  that  if  a  forgery  be  imposed  on  their  bankers,  the  principal 
would  not  be  the  sufferer  by  it ;  whereas,  if  it  were  imposed  on  themselves, 
thev  must  bear  the  loss,  and  so  would  exempt  themselves  from  that  liability 
which  would  rest  on  them  if  they  themselves  transacted  their  own  business. 
GiBBS,  C.  J.  I  concur  in  opinion  with  my  Brothers  Heath  and  Dallas. 
A  narrow  and  particular  ground  is  with  me  conclusive  on  this  case.  If  the 
acceptance  had  been  genuine,  and  the  plaintiffs  had  refused  payment,  the 
defendants  had  their  remedy  against  the  supposed  acceptor  ;  or  if  they 
failed  to  obtain  the  amount  from  him,  they  had  their  remedy  against  the 
prior  parties  on  the  bill.  The  acceptance  carried  with  it  an  order  on  the 
bankers  of  the  supposed  acceptor  to  pay  the  money ;  it  purported  to  be 
an  order  of  Evans,  whose  bankers  the  plaintiffs  were.  It  was  incumbent 
on  them  to  see  to  the  reality  of  that  order  before  they  obej-ed  it ;  and  if, 
by  obeying  it,  they  are  sufferers,  they  ought  not  to  throw  on  another  a  loss 
accruing  without  fault  of  his.  See  the  circumstances !  Tlie  defendants 
present  the  bill  for  payment,  and  it  is  paid  to  them.  The  money  remained 
in  their  hands  without  demand  made  on  them  for  it,  from  the  23d  of  April 
to  the  30th  of  April ;  the  forgery  being  then  discovered,  the  plaintiffs  demand 
it  back  from  the  defendants.  If  the  plaintiffs  had  originally  refused  to 
pay  this  money,  the  holder  would  immediately  have  given  notice  to  the 
drawer  and  to  the  immediate  indorser,  which  would  have  been  transmitted 
to  the  first  indorser  and  drawer.  In  consequence  of  the  bill  being  jiaid, 
the  defendants  continued  to  have  the  money  in  their  hands  till  the  30th 
of  April.  I  think  it  was  then  too  late  for  the  defendants  to  give  notice  to 
the  prior  parties ;  and  by  not  having  given  such  notice,  they  lost  their 
remedy  a^'ainst  those  parties.  If  a  person  liable  on  a  bill  does  not  receive 
notice  within  a  reasonable  time,  he  is  discharged  for  want  of  such  notice. 
Here  Temple  was  discharged  ;  by  whose  default?  By  the  plaintiffs'!  The 
defendants,  while  the  bill  continued  paid,  could  not  have  given  notice  to 
him  ;  for  the  bill  was  not  then  dishonored  ;  and  as  the  dcfen<lants  have 
lost  that  opportunity  by  the  negligence  of  the  jilaintiffs,  the  hitter  cannot 
recover  back  the  money  from  the  former.  I  liave  put  the  case  on  the 
express  point  that  by  the  acts  of  the  plaintiffs  the  defcnd.ints  arc  put  in  a 


220  WILKINSON   V.   JOHNSTON.  [CHAP.  XL 

worse  situation  ;  but  I  do  not  mean  thereby  to  express  my  dissent  from 
the  larger  ground  on  which  the  case  has  been  put  by  my  Brothers  Heath 
and  Dallas  ;  but  I  think  the  ground  on  which  I  have  put  it  is  alone  a 
sufficient  answer  to  all  the  arguments  that  have  been  used,  and  is  sufficient 
to  warrant  us  in  giving  Judgment  of  nonsuit. 


WILKINSON  AND  Others  v.  JOHNSTON  and  Others. 
In  the  King's  Bench,  November  27,  1824. 

[Reported  in  3  Barnewall  Sf  Cresswell,  428.] 

Assumpsit  brought  by  the  plaintiffs  to  recover  back  the  sum  of  589/. 
6s.  8d.,  paid  by  them  as  they  alleged  in  mistake  on  three  bills  of  exchange. 
At  the  trial  before  Abbott,  C.  J.,  at  the  London  sittings  before  Michaehnas 
term  4  G.  4.,  a  verdict  was  found  for  the  plaintiffs,  subject  to  the  opinion 
of  the  court  upon  the  following  case.  About  eleven  o'clock  on  the  morning 
of  Monday,  the  3d  of  February,  1823,  a  notary  public,  who  had  been  em- 
ployed by  Messrs.  Smith,  Payne  k  Smith,  to  note  three  bills  of  exchange 
which  became  due  on  the  Saturday  preceding,  and  which  he  had  on  that 
day  presented  for  payment  at  the  house  of  Messrs.  Mastermau  &  Co., 
where  they  were  made  payable,  and  refused  payment,  called,  in  consequence 
of  the  dishonor  of  the  said  bills,  but  without  any  order  from  Smith,  Payne 
&,  Smith,  with  the  said  bills  at  the  banking  house  of  the  plaintiffs,  who 
carry  on  trade  and  business  in  partnership  together  as  bankers  in  London, 
for  the  purpose  of  the  same  being  taken  up  by  the  said  plaintiffs,  for  the 
honor  and  on  account  of  Messrs.  A.  Hey  wood,  Sons  &  Co.,  who  appeared 
to  be  indorsers  upon  the  said  bills,  and  whose  London  bankers  the  said 
plaintiffs  then  were,  and  still  are.  The  following  is  a  copy  of  one  of  the 
said  bills  of  exchange,  and  of  the  several  indorsements  thereon. 

No.  214/.  10>\  Livkupool,  Oct.  30,  1822. 

Three  months  after  date,  pay  to  the  order  of  Charles  Thompson,  Esq., 
two  hundred  and  fourteen  pounds  ten  shillings  sterling,  value  received  as 

advised. 

Cropper,  Benson  &  Co. 
To  Messrs.  Birly  &  Hounby,  Manchester. 
To  be  paid  at  Masterinan's,  London. 

The  names  Birly  and  Hornb}'  were  written  across  the  bill,  and  it  was  in- 
dorsed, "  Charles  Thompson,  A.  Hcywood,  Sons  &  Co. ;  pay  to  the  order  of 
Mr.  Henry  G.  Harvey,  Geo.  Green,  Henry  G.  Harvey,  pay  Messrs.  H.  and 
T.  Johnson  &  Co.,  or  order  Gordon,  Batt  &  Co.,  H.  and  T.  Johnson  «fc 
Co."  The  other  bills  were  the  same  in  form  and  had  the  same  indorse- 
ments ;  they  were  drawn  for  187/.  8s.  id.  each.     The  notary  who  presented 


SECT.  I.]  WILKINSON   V.   JOHNSTON.  221 

the  bills  at  the  house  of  the  pliiintiffs  was  employed  to  present  and  note 
them  as  aforesaid,  by  Smith,  Payne  &  Smith,  bankers  in  London,    who 
held  the  same  as  the  bankers  and  agents  of  the  defendants,  who  are  iu 
partnership  together.     The  plaintiffs,  believing  that  the  bills  were  genuine 
bills,  and  that  the  indorsements  in  the  names  of  A.  Heywood,  Sons  &  Co., 
were  their  genuine  indorsements,  took  up  the  same  for  the  honor,  and  on 
the  account  of  the  said  A.  Heywood,  Sons  &  Co.,  and  forthwith  paid  to  the 
notary  who  presented  tlie  bills  the  sum  of  589/.  G«.  8d.,  being  the  amount 
of  the  several  bills,  which  was  carried  by  the  notary  and  paid  to  Smith, 
Payne  &  Smith,  as  the  bankers  of  the  defendants,  and  the  clerk  of  Smith, 
Payne  &  Co.  immediately  entered  the  same  in  their  counter  book.     The 
clerk  of  the  plaintiffs,  upon  paying  the  said  sum  to  the  notary,  struck  out 
all  the  indorsements  on  the  bills,  subsequent  to  that  of  Messrs.  A.  Hey- 
wood, Sons  &  Co.     Immediately  after  the  bills  were  so  paid  by  the  plain- 
tiffs, it  was  discovered  that  the  same  were  not  genuine  bills,  but  that  the 
nameri  of  the  drawers  and  acceptors,  and  the  names  of  A.  Heywood,  Sons 
&  Co.,  on  whose  account  the  payment  had  been  made,   were  forgeries. 
Upon  the  same  day  and  before  the  hour  of  one  o'clock,  the  plaintiffs  gave 
notice  to  the  defendants,  and  also  to  Smith,  Payne  &,  Smith,  that  the  bills 
were  discovered  not  to  be  genuine  bills,  but  that  the  same  were  forged  in 
the  particulars  before  mentioned ;  and  as  well  Smith,  Payne  &  Co.,  as  also 
the  defendants,  were  at  the  same  time  informed  that  the  names  of  the  in- 
dorsers,  subsequent  to  the  indorsement  purporting  to  be  the  indorsement  of 
A.  Heywood,  Sons  &  Co.,  had  been  struck  out  by  mistake,  and  under  the 
belief  that  the  indorsement  purporting  to  be  the  indorsement  of  A.  Hey- 
wood, Sons  &  Co.  was  genuine ;  and  the  plaintiffs  then  demanded  of  Smith, 
Payne  &  Smith,  and  of  the  defendants,  the  money  which  had  been  paid  by 
the  plaintiffs  as  aforesaid,  which  Smith,  Payne  &  Smith,  and  the  defend- 
ants, refused  to  return.     It  was  afterwards  agreed,  without  prejudice,  by 
the  plaintiffs  and  defendants,  that  the  defendants  should  return  the  bills  to 
the  indorsers  from  whom  they  received  them,  which  was  done  accordingly, 
and  such  indorsers  had  due  notice  as  well  of  the  presentment  of  the  bills  of 
exchange  at   the   place  where  payable,  and  of  their  being  dishonored,  as 
also  of  the  circumstances  above  detailed  ;  but  tlie  indorsers  refused  to  take 
them  up,  on  the  ground  that  the  bills  had  been  paid  by  the  plaintiffs ;  and 
also  on  the  ground  that  the  indorsements  before  mentioned  had  been  struck 
out,  and  that  the  indorsers  had  thereby  lost  their  remedy  over. 

Tindal  for  the  j)laintiffs. 

K.  V.  Richards  and  Parke  for  the  defendants. 

Abbott,  C.  J.  This  case  was  argued  before  three  of  the  judges  at  the 
sittings  in  the  adjoining  room,  and  again  before  the  wliolo  court  at  the 
sittings  before  the  present  term.  In  the  argument  two  points  were  made. 
First,  whether  the  plaintiffs  could  have  recovered  back  the  money  which 
they  paid  on  the  bills  in  question,  supposing  they  had  not  struck  out  the 


222  WILKINSON   V.   JOHNSTON.  [CHAP.  II. 

indorsements  subsequent  to  the  name  of  Hey  wood  &  Co.,  for  whose  honor 
they  paid  the  bills.  Secondly,  whether  their  right  to  recover  was  defeated 
by  that  act.-' 

Upon  the  first  question,  the  cases  of  Jones  v.  Ryde  ^  and  Bruce  v.  Bruce ' 
were  cited  for  the  plaintiffs  ;  and  Price  v.  Neal  *  and  Smith  v.  Mercer  ^  for 
the  defendants.  The  general  rule  of  law  is  clear  and  not  disputed  ;  viz., 
that  money  paid  under  a  mistake  of  facts  may  be  recovered  back,  as  being 
paid  without  consideration.  To  this  rule,  the  two  cases  cited  for  the  de- 
fendant are  an  exception.  The  question  is,  whether  the  present  case  be 
properly  within  the  rule,  or  within  the  exception.  The  case  of  Price  v. 
Neal  was  that  of  a  man  upon  whom  two  bills  of  exchange  falling  due  at 
different  times  were  drawn  :  he  paid  the  first  when  presented  at  maturity, 
not  having  accepted  it,  and  accepted  and  paid  the  second.  This  was  all 
done  under  a  mistaken  opinion  that  the  signature  of  the  supposed  drawer 
was  genuine.  Some  time  afterwards,  it  was  discovered  that  the  signature 
of  the  drawer  was  forged.  The  decision  of  Lord  Mansfield  against  the 
plaintiff  appears  not  to  have  been  grounded  on  the  delay,  but  rather  upon 
the  general  principle,  that  an  acceptor  is  bound  to  know  the  handwriting 
of  the  drawer,  and  that  it  is  rather  by  his  fault  or  negligence  than  by  mis- 
take, if  he  pays  on  a  forged  signature.  The  case  of  Smith  v.  Mercer  was 
that  of  a  banker  at  whose  house  a  bill  purporting  to  be  accepted  by  one  of 
his  customers  was  made  payable.  The  forgery  of  the  acceptor's  name  was 
not  discovered  until  the  end  of  a  week.  In  this  case  Mr.  Justice  Chambre 
thought  the  plaintiffs  entitled  to  recover.  The  other  judges  were  of  a 
different  opinion.  Mr.  Justice  Dallas  appears  to  have  founded  his  judg- 
ment principally  on  the  supposed  fault  or  neglect  of  the  plaintiffs,  who 
ought  to  have  known  the  signature  of  their  customer ;  though  he  also 
notices  the  delay,  and  the  inconvenience  that  might  thereby  result  to  the 
holders  of  the  bill.  Mr.  Justice  Heath  appears  to  have  given  his  judg- 
ment entirely  on  the  ground  of  the  fault  or  neglect  of  the  plaintiffs,  who 
could  not,  in  his  opinion,  be  in  a  different  situation  from  that  in  which 
their  customer  would  have  stood  if  he  had  paid  the  bill  himself.  The 
Lord  Chief  Justice  Gibbs  grounds  his  judgment  on  the  delay  as  sufficient 
for  the  decision  of  the  cause ;  at  the  same  time,  however,  declaring  that  he 
does  not  mean  thereby  to  express  his  dissent  from  the  larger  ground  on 
which  the  case  had  been  put  by  the  other  two  judges. 

Now,  if  we  compare  the  facts  of  the  present  case  with  those  of  the  two 
cases  before  mentioned,  we  shall  find  some  important  difference.  The 
plaintiflf's  were  not  the  drawees  or  acceptors  of  the  bills,  nor  the  agents  of 
any  supposed  acceptor.  They  discovered  the  mistake  in  the  morning  of 
the  day  they  made  the  payment,  and  gave  notice  thereof  to  the  defendants 
in  time  to  enable  them  to  give  notice  of  the  dishonor  to  the  prior  parties, 

1  So  much  of  the  opinion  as  relates  to  this  question  has  been  omitted.  —  Ed. 

2  5  Taunt.  488.  »  5  Taunt.  495.  *  3  Burr.  1354.  ^  q  Taunt.  76. 


SECT.  1.]  WILKINSON   V.   JOHNSTON.  223 

which  was  accordingly  given.  The  plaintiffs  were  called  upon  to  pay  for 
the  honor  of  Heywood  &  Co.,  whoee  names  appeared  on  the  bills  among 
other  iudorsers.  The  very  act  of  calling  upon  them  in  this  character  was 
calculated  in  some  degree  to  lessen  their  attention.  A  bill  is  carried  for 
payment  to  the  person  whose  name  appears  as  acceptor,  or  as  agent  of  an 
acceptor  entirely  as  a  matter  of  course.  The  person  presenting  very  often 
knows  nothing  of  the  acceptor,  and  merely  carries  or  sends  the  bill  accord- 
ing to  the  direction  that  he  finds  upon  it ;  so  that  the  act  of  presentment 
informs  the  acceptor  or  his  agent  of  nothing  more  than  that  his  name  ap- 
pears to  be  on  the  bill  as  the  person  to  pay  it ;  and  it  behoves  him  to  see 
that  his  name  is  properly  on  the  bill.  But  it  is  by  no  means  a  matter  of 
course  to  call  upon  a  person  to  pay  a  bill  for  the  honor  of  an  indorscr ; 
and  such  a  call,  therefore,  imports  on  the  part  of  the  person  making  it, 
that  the  name  of  a  correspondent,  for  whose  honor  the  payment  is  asked, 
is  actually  on  the  bill.  The  person  thus  called  upon  ought  certainly  to 
satisfy  himself  that  the  name  of  his  correspondent  is  really  on  the  bill ;  but 
still  his  attention  may  reasonably  be  lessened  by  the  assertion,  that  the 
call  itself  makes  to  him  in  fact,  though  no  assertion  may  be  made  in  words. 
And  the  fault,  if  he  pays  on  a  forged  signature,  is  not  wholly  and  entirely 
his  own,  but  begins  at  least  with  the  person  who  thus  calls  upon  him. 
And  though,  where  all  the  negligence  is  on  one  side,  it  may  perhaps  be 
unfit  to  inquire  into  the  quantum,  yet  where  there  is  any  fault  in  the  other 
party,  and  that  other  party  cannot  be  said  to  be  wholly  iunocent,  he  ought 
not,  in  our  opinion,  to  profit  by  the  mistake,  into  which  he  may  by  his  own 
prior  mistake  have  led  the  other ;  at  least,  if  the  mistake  is  discovered  be- 
fore any  alteration  in  the  situation  of  any  of  the  other  parties,  that  is, 
■whilst  the  remedies  of  all  the  parties  entitled  to  remedy  are  left  entire,  and 
no  one  is  discharged  by  laches.  Further,  it  is  not  easy  to  reconcile  the 
opinion  of  some  of  the  judges  in  Smith  v.  Mercer,  with  the  prior  judgment 
of  the  same  court  in  Bruce  v.  Bruce.  That  was  the  case  of  a  victualling 
bill,  of  which  the  sum  was  altered  and  enlarged,  and  in  this  alteration  the 
forgery  consisted.  The  whole  sum  was  paid  at  the  victualling  office  when 
the  bill  was  presented  by  the  Bank  of  England,  but  the  forgery  being  dis- 
covered, the  bank  paid  back  the  difference,  and  then  called  upon  their  cus- 
tomer, the  plaintiff,  who  repaid  the  bank,  and  brought  his  action  against 
the  defendant,  from  whom  he  had  received  tiie  bill  in  its  altered  state. 
Now,  if  the  payment  of  the  whole  sum  at  the  victualling  office  could  not  by 
law  be  rescinded  on  the  ground  of  mistake,  the  refunding  of  part  by  the 
bank,  and  afterwards  by  the  plaintiff,  was  an  act  done  in  their  own  wrong, 
and  conseqtiently  not  binding  ujjon  the  defendant,  nor  giving  a  right  of 
action  against  him.  We  think  the  present  case  approaches  in  principle 
nearer  to  that  of  Bruce  v.  Bruce,  than  to  either  of  the  other  two.  Wo 
think  the  payment  in  this  case  was  a  payment  by  mistake  and  without 
consideration  to  a  person  not  wholly  free  from  blame,  and  who  ought  not, 


224  COCKS   V.    MASTERMAN.  [CHAP.  11. 

therefore,  in  our  opinion,  to  retain  the  money,  unless  the  act  of  drawing 
the  pen  through  the  names  of  the  other  indorsers  will  have  the  effect  of 
discharging  them,  and  thereby  deprive  the  defendants  of  their  rights  to  re- 
sort to  them.  Fostea  to  the  plaintiffs. 


COCKS  AND   Others  v.   MASTERMAN  and   Others. 
In  the  King's  Bench,  Trinity  Term,  1829. 

{Reported  in  9  Barneivall  and  Cresswell,  902.] 

Assumpsit  for  money  paid,  had  and  received,  etc.  Plea,  7io?i  assumpsit. 
At  the  trial  before  Lord  Tenterden,  C.  J.,  at  the  London  sittings  after 
Michaelmas  term,  1827,  a  special  verdict  was  found,  stating  in  substance  .is 
follows :  Long  before,  and  at  the  several  times  hereinafter  mentioned,  the 
plaintiffs  carried  on  business  as  bankers  at  Charing  Cross,  in  the  city  of 
Westminster,  and  the  defendants  carried  on  business  as  bankers  in  Nicholas 
Lane,  in  the  city  of  London.  Before  and  on  and  after  the  24th  of  May, 
1827,  certain  persons  carrying  on  trade  and  business  under  the  firm  and 
style  of  Sewell  &  Cross,  kept  an  account  and  cash  with  the  plaintiff's  as 
their  bankers ;  and  certain  other  persons,  carrying  on  trade  and  business 
under  the  firm  and  style  of  Sanderson  &  Co.,  kept  an  account  and  cash 
with  the  defendants,  as  their  bankers;  and  before  the  said  24th  of  May  a 
bill  of  exchange,  drawn  by  one  T.  Button  upon  Sewell  &  Cross,  bearing 
date  the  21st  of  March,  1827,  for  198/.  19s.,  payable  two  months  after  date 
to  the  order  of  T.  Button,  and  indorsed  by  the  said  T.  Button,  and  also  by 
C.  Heginbotham  and  one  J.  Harris,  and  purporting  to  be  accepted  by 
Sewell  &  Cross,  payable  at  the  plaintiffs',  w'as  paid  to  the  defendants  by 
Sandei'son  &  Co.,  to  their  credit  with  the  defendants ;  and  upon  the  said 
24th  of  May  the  defendants  presented  the  said  bill  to  the  plaintiffs,  and 
required  them  to  pay  the  same  according  to  the  said  acceptance,  and  that 
the  plaintiff's,  believing  the  acceptance  to  be  that  of  Sewell  &  Cross,  paid 
to  the  defendants  the  sum  of  198/.  19s.  as  the  amount  of  the  bill  of  ex- 
change so  purporting  to  be  accepted  as  aforesaid ;  that  on  the  25th  day  of 
May  (being  the  day  next  following  the  day  on  which  such  payment  was 
made)  the  plaintiff's  discovered  that  the  acceptance  on  the  bill  was  not  the 
acceptance  of  Sewell  &  Cross,  but  that  the  same  was  forged  by  T.  But- 
ton, the  drawer  of  such  bill ;  that  the  said  acceptance  was  in  fact  so 
forged ;  and  that  on  the  said  25th  of  May,  about  one  o'clock,  the  plaintiff's 
gave  notice  to  the  defendants  and  to  J.  Harris,  the  indorser,  and  to  Sander- 
son &  Co.,  that  the  same  was  so  forged ;  and  that  the  said  payment  had 
been  made  by  them  under  a  mistake,  and  in  ignorance  of  the  acceptance 
being  so  forged,  and  they  requested  the  defendants  to  repay  them  the  said 
sum  of  198/.  19s. ;  and  on  the  same  day  one  Thomas  Gates,  as  attorney  for 


SECT.  I.]  COCKS   V.    MASTER  MAN.  225 

the  Bankers'  Society  for  Protection  against  Forgers,  and  of  which  society 
the  plaintitfs  and  defendants  were  members,  sent  the  following  letter  to 
C.  Heginbothani,  the  other  indorser,  and  also  a  like  one  to  J.  Harris:  — 
"Sir,  a  bill  of  exchange,  bearing  your  indorsement,  for  198/.  19s.,  drawn  by 
Thomas  Dutton,  and  purporting  to  be  accepted  by  Sewell  &  Cross,  and 
indorsed  by  you  to  J.  Harris,  due  yesterday,  has  been  refused  payment, 
and  now  lies  with  me,  the  acceptance  being  forged ;  and  if  the  same  is  not 
taken  up  by  ten  o'clock  to-morrow,  legal  proceedings  will  be  taken  against 
all  parties."  The  sum  of  198/.  19«.  was  entered  by  the  plaintiffs  in  the 
day-book,  to  the  debit  of  Sewell  &  Cross,  but  was  not  carried  into  the 
ledger  or  further  charged  to  their  account;  Sanderson  &  Co.  did  not 
draw  out  of  the  hands  of  the  defendants  any  sum  of  money  upon  the  credit 
of  or  in  respect  of  the  said  bill,  and  the  balance  of  monies  belonging  to 
Sanderson  &  Co.,  in  the  hands  of  the  defendants  as  their  bankers,  both 
before  and  at  and  after  the  several  days  before  mentioned,  greatly  exceeded 
the  said  sum  of  198/.  19s. 

JR.   V.  Richardu  for  the  plaintiff. 

Pollock  for  the  defendant. 

Batley,  J.,  now  delivered  the  judgment  of  the  court. 

This  was  an  action  brought  by  Cocks  &  Co.,  bankers  in  London,  to 
recover  a  sum  of  money  paid  by  them  to  the  defendants,  on  the  ground 
that  they,  having  paid  the  money  in  mistake  and  ignorance  of  the  facts, 
were  entitled  to  recover  it  back.  The  bill  was  presented  the  24th  of  May, 
the  day  on  which  it  became  due.  The  plaintiffs  paid  it,  not  knowing  that 
it  was  not  the  genuine  acceptance  of  Sewell  &  Cross.  On  the  following 
day  it  was  discovered  that  the  acceptance  was  a  forgery,  and  the  plaintiffs 
on  that  day  gave  notice  to  the  defendants.  It  was  insisted  that  the  plain- 
tiffs were  not  entitled  to  recover,  because  they,  being  bankers,  ought,  before 
thev  paid  the  bill,  to  have  satisfied  themselves  that  the  acceptance  was 
genuine.  On  the  other  hand  it  was  said  that  the  plaintiffs,  having  given 
notice  of  the  forgery  to  the  defendants  on  the  day  next  after  the  bill  had 
been  paid,  were  entitled  to  recover  back  the  monc}',  on  the  ground  that 
they  had  paid  the  money  under  a  mistaken  supposition  that  the  acceptance 
was  the  geniiine  acceptance  of  Sewell  &  Cross,  and  the  case  of  Wilkinson 
V.  Johnston  '  was  relied  on.  That  case  differs  from  the  present  in  one  mate- 
rial point,  viz.,  that  the  notice  of  the  forgei-y  was  given  on  the  very  <iay 
when  payment  was  made,  and  so  as  to  euf.ble  tlic  defendant  to  send  notice 
of  the  dishonor  to  the  i)rior  parties  on  that  day.  In  this  case  we  give  no 
opinion  upon  the  point,  whether  tlie  plaintiffs  would  have  been  entitled  to 
recover  if  notice  of  the  forgery  had  been  given  to  the  defendants  on  the 
very  day  on  which  the  bill  was  paid,  so  as  to  enable  the  defendants  on  that 
day  to  have  sent  notice  to  other  parties  on  the  bill.  But  we  arc  all  of 
opinion  that  the  holder  of  a  bill   is  entitled  to  know,  on  the  day  when  it 

1  3  B.  &  r.  428. 
15 


226  LEATHER   V.   SIMPSON.  [CHAP.  II. 

becomes  due,  whether  it  is  an  honored  or  dishonored  bill,  and  that,  if  he 
receive  the  money  and  is  suffered  to  retain  it  during  the  whole  of  that  day, 
the  parties  who  paid  it  cannot  recover  it  back.  The  holder,  indeed,  is  not 
bound  by  law  (if  the  bill  be  dishonored  by  the  acceptor)  to  take  any  steps 
against  the  other  parties  to  the  bill  till  the  day  after  it  is  dishonored.  But 
he  is  entitled  so  to  do,  if  he  thinks  fit,  and  the  parties  who  pay  the  bill 
ought  not  by  their  negligence  to  deprive  the  holder  of  any  right  or  privi- 
lege. If  we  were  to  hold  that  the  plaintiffs  were  entitled  to  recover,  it 
would  be  in  effect  saying  that  the  plaintiffs  might  deprive  the  holder  of  a 
bill  of  his  right  to  take  steps  against  the  parties  to  the  bill  ou  the  day 

when  it  becomes  due. 

Judgment  foi'  the  defendants. 


LEATHER  v.   SIMPSON. 
In  Chancery,  before  Sir  E.  Malins,  V.  C,  January  26,  1871. 

[Reported  in  Law  Reports,  1 1  Equity,  398.] 

The  plaintiffs,  Messrs.  Leather  &  Marriott,  were  cotton  brokers  at  Liver- 
pool, and  the  plaintiff,  J.  N.  Beach,  was  a  merchant  at  Liverpool ;  the 
defendant  J.  H.  Simpson  was  the  registered  officer  of  the  Bank  of  Liverpool, 
and  the  defendant  J.  Chapman  was  the  registered  officer  of  the  Union  Bank 
of  London. 

In  August,  1870,  the  Bank  of  Liverpool  held,  as  agents  for  the  Union 
Bank  of  London,  two  bills  of  exchange,  one  for  £3925  Os.  Zd.,  dated  the 
23rd  of  May,  1870,  and  the  other  for  £4054  13s.  Id.,  dated  the  25th  of 
May,  1870,  both  being  payable  sixty  days  after  sight.  The  bills  were 
drawn  upon  J,  N.  Beach  by  G.  Shute,  bis  correspondent  at  New  Orleans, 
one  being  drawn  against  251  bales  of  cotton  and  the  other  against  253 
bales  of  cotton,  shipped  in  the  William  Cummings. 

The  bills  were  presented  to  Beach  for  acceptance,  and  there  was  attached 
to  the  first  bill  the  following  memorandum  :  "  The  Union  Bank  of  London 
holds  bill  of  lading  and  policy  for  251  bales  of  cotton,  per  William  Cum- 
mings ; "  and  to  the  other  bill  was  attached  a  similar  memorandum  in 
respect  of  the  253  bales  of  cotton. 

J.  N.  Beach  accepted  both  bills  of  exchange,  as  he  alleged,  in  the  belief 
that  the  Union  Bank  of  London  had  in  their  possession  at  the  time  the  said 
bills  of  lading,  and  that  the  statements  to  that  effect  in  the  two  memoranda 
were  true ;  he  stated  that  he  would  have  refused  to  accept  such  bills  of  ex- 
change if  he  had  not  believed  that  at  the  time  of  their  being  so  presented  for 
acceptance  the  Union  Bank  had  valid  bills  of  lading  for  the  cotton,  and  that 
the  proceeds  of  the  sale  of  such  cotton  would  be  applicable  to  the  payment 
of  the  bills  of  exchanofe.     J.  N.  Beach  did  not  see  the  documents  referred  to 


SECT.  I.]  LEATHER   V.    SIMPSON.  227 

in  the  memorandum  when  he  accepted  the  two  bills  of  exchange,  nor  did 
he  demand  an  inspection  of  them. 

Before  the  bills  became  due,  J.  N.  Beach,  with  the  assistance  of  Messrs. 
Leather  k.  Marriott,  retired  the  bills  of  exchange,  and  they  paid  between 
them  £79G9  Os.  Gc/.,  the  amount  of  the  bills,  less  a  small  sum  for  rebate  of 
interest,  and  thereupon  the  bills  of  exchange  and  two  documents,  pur- 
porting to  be  the  bills  of  lading  of  the  251  bales  and  253  bales  of  cotton, 
shipped  per  William  Cummings,  were  delivered  up  to  the  plaintiffs  by  the 
Bank  of  Liverpool. 

Upon  receiving  these  documents,  which  appeared  to  be  signed  by  G.  E. 
Miller,  as  master  of  the  ship  William  Cummings,  the  plaintiffs  discovered 
that  the  signature  to  both  bills  of  lading  had  been  forged.  The  plaintiffs 
were  therefore  unable  to  obtain  delivery  of  the  cotton,  the  genuine  bills  of 
lading  being  held  by  other  persons.  The  bill  prayed  a  declaration  that  the 
defendants  were  bound  in  equity  to  repay  to  the  plaintiffs  the  said  sum  of 
£7969  0.-?.  6(/. 

The  defendants,  by  their  answer,  stated  that  the  two  bills  of  exchange 
were  accepted  by  J.  N.  Beach  without  any  condition  or  qualification  what- 
ever, and  that  the  memoranda  were  attached  to  such  bills  of  exchange  in 
accordance  with  the  usual  custom  of  the  Union  Bank  of  London  in  dealing 
with  those  bills,  which  were  called  document  bills.  It  was  further  stated 
that  the  Union  Bank  of  London  were  the  agents  in  this  country  of  Messrs. 
Schnchardt  &  Sons  of  New  York,  by  whom  the  two  bills  of  exchange  were 
received  for  value,  and  were  forwarded  to  them  for  presentation  and 
realization. 

There  was  evidence  to  show  that  Shute  was  in  the  habit  of  sending  con- 
signments of  cotton  to  J.  N.  Beach,  and  of  drawing  bills  of  exchange  upon 
him  against  bills  of  lading,  and  also  that  a  letter  was  received  by  J.  N. 
Beach  from  Shute  on  the  23rd  of  May,  1870,  intimating  that  these  two 
consignments  of  cotton  would  be  forwarded  to  him,  and  that  bills  of  ex- 
change would  be  drawn  by  Shute  upon  J.  N.  Beach  in  the  usual  manner. 

Mr.  Cotton,  Q.  C,  Mr.  Bardsivell,  and  Mr.  /.  P.  Benjamin,  for  the 
plaintiffs. 

Mr.  PoUod;  Q.  C,  Mr.  Pearson,  Q.  C,  and  Mr.  Jackson,  for  the 
defendants. 

Sir  li.  Malixs,  V.  C.  This  case  is  one  which  in  a  remarkable  manner 
illustrates  the  perils  of  commercial  life.  It  is  one  of  perfect  good  faith  on 
both  sides;  and  the  question  is,  which  of  two  innocent  parties  is  to  sutler 
l)y  the  fraud  which  has  been  committed  by  issuing  forged  bills  of  lading! 

The  claim  on  the  part  of  the  plaintiffs  is  rested  uj>on  this,  that  the  plain- 
tiff Beach  accepted  the  bills  on  the  faith  of  the  representation  made  by  tlio 
Union  Bank  of  London,  contained  in  the  notes  attached  to  the  bills:  " 'iljo 
Union  Bank  of  London  holds  bill  of  lading  and  policy  for  251  bales  of  cot- 
ton, per  William  Cummings."     It  is  urged  that  that  is  a  reprcscntatioa  by 


228  LEATHER   V.    SIMPSON.  [CHAP.  II. 

the  bank  that  they  hold  a  genuine  bill  of  lading,  and  therefore  that  the 
person  who  is  called  upon  to  accept  the  bill  will  have  the  security  of  a  docu- 
ment which  will  insure  to  him  the  delivery  of  251  bales  of  cotton.  Against 
that,  it  is  said,  there  is  no  representation  of  genuineness ;  there  is  no  guar- 
antee. The  bank  do  not  undertake  to  say  whether  the  bill  of  lading  is 
good  or  not  3  the}'  only  say,  "We  have  a  bill  of  lading,"  the  fair  meaning 
of  which  may  possibly  be,  "  We  have  a  document  which  on  the  face  of  it  is 
a  bill  of  lading."  Nothing  had  occurred  to  excite  their  suspicion  ;  they 
believed  it  to  be  a  bill  of  lading,  and  they  therefore  called  it  so.  Then 
does  this  amount  to  a  representation  that  it  was  a  genuine  bill  of  lading^ 
The  question  that  arises  is,  whether,  by  this  representation,  the  position  of 
the  plaintiffs  has  been  in  any  way  altered.  Su])pose  the  bill  of  lading  had 
been  forwarded  with  the  bill  of  exchange,  which  is  the  usual  course  of  busi- 
ness. It  is  perfectly  clear,  I  apprehend,  that  the  plaintiff  Beach  would  not 
have  accepted  this  bill  without  the  bill  of  lading  accompanying  it,  if  it  had 
been  in  the  hands  of  parties  unknown  to  him,  and  who  were  not  so  respon- 
sible as  he  knew  the  Union  Bank  to  be.  The  representation  of  the  Union 
Bank  that  they  had  the  bill  of  lading  was  a  sufficient  assurance  to  the 
plaintiff"  Beach  that  that  bill  of  lading  would  be  forthcoming  in  proper 
time.  He  therefore  gives  credence  to  their  representation,  and  acts  upon 
the  faith  of  it ;  but  does  this  make  the  case  different  from  what  it  would 
have  been  if  the  bill  of  lading  had  actually  been  forwarded?  I  cannot  come 
to  the  conclusion  that  this  puts  the  plaintiffs  in  a  different  situation  from 
that  in  which  they  would  have  been  if  the  bill  of  lading  had  accompanied 
the  bill  of  exchange.  If  it  had  so  accompanied  tlie  bill  of  exchange,  would 
Beach  have  accepted  if?  The  best  proof  that  he  would  is  this,  that  on  the 
2nd  of  August,  when  the  plaintiffs  are  desirous  of  having  the  cotton,  the 
bill  of  lading  is  put  into  their  hands  ;  they  pay  the  money  on  the  faith  of 
it;  they  take  the  bill  of  exchange  and  the  bill  of  lading  in  the  perfect  belief 
that  it  is  a  genuine  document,  make  no  inquiry  with  regard  to  it,  take  it 
to  the  captain  of  the  ship,  and  then,  for  the  first  time,  discover  that  they 
have  been  imposed  upon,  as  all  parties  engaged  in  the  transaction  had  been. 
Was  there  then,  a  guarantee  by  the  Union  Bank  1  It  would  be  a  very  dan- 
gerous thing  for  a  bank  if,  where  they  say  tliey  have  a  document  of  that 
kind,  they  were  to  be  held  to  guarantee  its  genuineness.  My  opinion  is, 
they  do  nothing  of  the  kind.  I  think  the  plaintiff  Beach,  if  the  matter  had 
been  the  subject  of  the  slightest  degree  of  suspicion,  ought  to  have  required 
to  see  the  bills  of  lading  before  he  accepted  the  two  bills  of  exchange,  in 
order  to  test  the  signature,  and  see  that  they  were  perfectly  safe.  That  is 
the  course  which  he  might  have  taken,  but  did  not.  In  my  opinion,  the 
plaintiffs  are  precisely  in  the  same  position  as  they  would  have  been  if  the 
bills  of  lading  had  been  produced  before  the  bills  of  exchange  were  ac- 
cepted, and  they  are  therefore  in  the  same  situation  as  if  this  bill  of  ex- 
change had  had  annexed  to  it  the  bill  of  lading,  and  had  then  been  accepted 


SECT.  I.]  LEATIIEK   V.   SIMPSON.  229 

in  the  belief  that  the  bill  of  lading  was  a  gennine  document.  It  certainly 
is  of  the  highest  importance  to  tlie  commercial  interests  of  this  conntry 
that  discredit  should  never  be  thrown  ufon  a  bill  of  exchange  if  it  be  pos- 
sible to  avoid  it.  No  doubt  tliere  are  in  this  court  instances,  not  so  much  of 
commercial  bills  as  bills  of  exchange,  which  young  men  are  in  the  habit  of 
accepting,  upon  which  this  court  will  alwa3'8  stay  an  action  where  a  proper 
case  is  made  for  doing  so,  but  it  must  be  a  very  peculiar  case.  What 
would  have  beeu  the  position  of  the  parties  if  they  had  discovered  this 
fraud  (as  they  did  on  the  2nd  of  August)  before  they  wanted  the  cotton  1 
They  would  have  said  this  :  "  Beach  was  induced  to  accept  the  bill  of  ex- 
change by  fraud  ;  it  is  not  binding."  And  if  they  are  entitled  to  recover 
the  money  back,  as  they  now  seek  in  this  suit  to  do,  it  is  perfectly  clear 
they  would,  before  they  paid  the  money,  have  been  entitled  to  get  the  bill 
of  exchange  itself  back.  But  that  is  a  point  which  is  absolutely  settled  by 
the  case  of  Thiedenianu  v.  Goldschraidt.^  I  am  not  able  to  see  that  there 
is  a  shadow  of  ditference  between  Tliiedemann  v.  Goldschmidt  and  the 
present  case,  except  this,  that  here  the  money  was  actually  paid  before 
maturity,  on  a  rebate  of  interest,  and  there  the  bill  remained  out.  In 
Thiedemann  v.  Goldschmidt,  Yice-Chancellor  Stuart  ordered  the  bill  of 
exchange  to  be  delivered  up  to  be  cancelled.  The  case  afterwards  came 
before  the  full  Court  of  Appeal,  consisting  of  the  Lord  Chancellor  Camt- 
BELL,  Lord  Justice  Knight  Bruce,  and  Lord  Justice  Turner,  who  held  that 
there  was  no  equity  for  the  delivery  up  of  the  bill. 

That  is  precisely  the  position  that  the  present  parties  would  have  been 
in  if  they  had  filed  a  bill  to  have  the  acceptances  delivered  up.  If  in  that 
case,  therefore,  there  was  no  equity  to  have  the  bill  delivered  up,  it  is,  in 
my  opinion,  a  decision  that  in  this  case  the  plaintift's  liaA'e  no  equity  to 
have  the  money  back.  With  regard  to  the  case  of  K(jbinson  v.  Rej'nolds,^ 
that  was  said  to  turn  very  much  on  the  question  of  pleading;  but  I  am  nut 
able  to  look  upon  it  in  the  same  way.  It  is  a  precisely  similar  case.  Loi-d 
Denman's  judgment,  confirmed  by  the  Court  of  Exchequer  Chamber,  is 
perfectly  distinct.  Lord  Denman  says  :  "  The  plea  does  not  show  that  the 
plaintiffs"  —  that  is,  the  holder  of  the  bill,  the  person  who  obtained  the 
acceptance  on  the  belief  of  the  genuineness  of  the  bill  of  lading  —  "made 
any  representation  which  they  knew  to  be  false,  nor  that  they  warranted 
the  bill  of  lading  to  be  genuine,  nor  does  it  disclose  that  the  defendants 
accepted  the  bill  of  exchange  on  which  the  action  is  brought  upon  tlie  faith 
of  any  assertion  by  the  plaiutifTs,  farther  than  their  indorsement  upon  it, 
that  the  bill  of  lading,  which  turned  out  to  be  forged,  was  genuine.  On 
the  contrary,  it  appears  by  the  other  averments  in  the  plea,  that  the  drawer 
of  the  bill  was  the  correspondent  of  the  defendants,  and  that  it  was  upoii 
his  authentication  of  tlie  bill  of  lading,  as  referring  to  goods  which  he  pro- 
fessed to  have  consigned  to  them,  that  they  acted." 

1  1  OilT.  142.  «  2  Q.  B.  I'Jfl,  202. 


230  LEATHER   V.    SIMPSON.  [CHAP.  II. 

Now,  I  think  the  observations  there  are  very  applicable  to  the  present 
case.  Shute  was  the  correspondent  of  the  plaintiff'  Beach  at  Liverpool.  He 
informed  him  by  letter  that  he  was  going  to  send  the  cotton  by  the  William 
Cummings.  It  arrives  by  that  ship,  and  it  was  the  usual  course  of  dealing 
with  the  plaintiff"  Beach  that  whenever  he  accepted  these  bills  drawn  by 
Shute  he  had  the  bill  of  lading.  Therefore  he  expected  that  there  would 
be  a  bill  of  lading  coming  from  his  own  correspondent  Shute.  And  so  far 
from  the  Union  Bank  misleading  Beach,  I  am  of  opinion  that  Beach  could 
only  have  understood  it  in  one  way,  —  that  Shute  had  transmitted  a  bill  of 
lading,  and  the  bank  had  that  bill  of  lading,  which  would  be  forwarded  for 
inspection  if  required.  If  the  bill  was  accepted,  then  the  bill  of  lading 
would  be  handed  over  when  the  bill  arrived  at  maturity,  and  when  the 
acceptor  was  called  on  to  pay  it.  Therefore,  I  think,  to  say  that  there  was 
any  misleading  by  the  Union  Bank  is  attempting  to  carry  the  case  far 
beyond  anything  that  the  facts  warrant. 

At  to  the  general  law  of  misrepresentation,  I  do  not  think  it  necessary 
to  go  into  it  in  this  case,  because  the  law  is  perfectly  clear,  that  if  the 
court  was  warranted  in  treating  this  as  a  representation  by  the  Union 
Bank  of  London,  as  if  they  had  said,  "  We  hold  the  bill  of  lading,  which  is 
a  genuine  bill  of  lading,  or  which  we  guarantee  to  be  a  genuine  bill  of  lad- 
ing"—  then  if  they  had  so  undertaken,  and  it  turned  out  to  be  a  bad  bill 
of  lading,  it  would  have  been  money  obtained  on  a  representation  which 
was  untrue ;  and  the  rules  of  this  court  are  settled,  that  when  a  represen- 
tation in  a  matter  of  business  is  made  by  one  man  to  another  calculated  to 
induce  him  to  adapt  his  conduct  to  it,  it  is  perfectly  immaterial  whether 
the  representation  is  made  knowing  it  to  be  untrue,  or  whether  it  is  made 
believing  it  to  be  true,  if,  in  fact,  it  was  untrue  ;  because  every  man  making 
a  representation  inducing  another  to  act  on  the  faith  of  that  representation 
must  make  it  good  if  he  takes  upon  himself  to  represent  that  which  he  does 
not  know  to  be  true,  and  he  is  equally  bound  if  he  made  it  without 
knowing  it  to  be  untrue.  Therefore,  if  the  memorandum  relied  upon  had 
amounted  to  a  representation  that  the  document  was  genuine  or  a  guaran- 
tee, the  consequence  would  be  plain  that  the  plaintiff^s  must  have  been 
indemnified  by  the  Union  Bank  of  London,  and  the  money  they  have  re- 
ceived must  have  been  returned,  because  it  was  obtained  upon  a  represen- 
tation which  turns  out  to  be  untrue.  If  there  be  a  distinction  between 
th's  case  and  the  cases  of  Thiedemann  v.  Goldschmidt^  and  Robinson  v. 
Keynolds,'^  I  confess  it  appears  to  me  to  be  rather  more  unfavorable  to  the 
plaintiffs,  because  in  Thiedemann  v.  Goldschmidt  the  money  had  not  been 
paid,  whereas  here  they  elected  to  pay  the  money  on  a  rebate  of  intei-est  be- 
fore the  bill  became  due,  which  precludes  them  from  saying  that  it  had  not 
arrived  at  maturity.  The  plaintiff*  Beach  trusted  to  his  own  correspondent 
Shute,  that  he  would  not  transmit  anything  but  a  genuine  bill  of  lading. 

1  1  De  G.  F.  &  J.  4.  2  2  Q.  B.  196. 


SECT.  I.]  CAXAL   BANK   V.   BANK   OF   ALBANY.  231 

The  equities  between  these  parties  are  equal ;  the  parties  are  equally  inno- 
cent in  the  transaction  ;  they  have  all  been  imposed  upon ;  but  there  is 
this  difference,  that  one  of  them,  by  the  course  of  the  transaction,  has  been 
in  possession  of  the  money,  and  I  am  at  a  loss  to  see  any  ground  upon 
Avhich  I  can  be  justified  in  making  a  decree  that  that  money  should  be 
restored.  I  can  see  no  distinction  between  a  bill  filed  to  have  the  accept- 
ance delivered  up  before  it  has  arrived  at  maturity,  and  a  bill  filed  to  have 
the  money  restored  after  the  bill  has  arrived  at  maturity,  or  has  been 
treated  as  having  arrived  at  maturity,  and  the  amount  of  it  paid. 

Upon  these  grounds  I  am  of  opinion  that  the  bill  fails,  and  must  be 
dismissed. 


CANAL  BANK  v.   BANK  OF  ALBANY. 

In  the  Supreme  Court  of  New  York,  May,  184L 
[Reported  in  1  Hill,  287.] 

Assumpsit,  to  recover  money  paid  on  a  draft,  tried  at  the  Albany  circuit, 
in  1840,  before  Cushman,  C,  Judge.  The  draft  was  drawn  on  the  plain- 
tiffs by  the  Montgomery  County  Bank,  payable  to  the  order  of  E.  Bentley, 
Jr.  It  purported  to  have  been  indorsed  successively  by  Bentley,  then  by 
one  Budd,  afterward  by  the  Bank  of  New  York,  and  lastly  by  the  defend- 
ants, to  whom  the  plaintiffs  paid  it.  The  payment  of  it  was  made  on  tiie 
28th  of  March,  1839.  The  ground  on  which  the  plaintiffs  sought  to  re- 
cover back  the  money  was,  that  the  indorsement  purporting  to  be  that 
of  Bentley  was  a  forgery,  which  fsict  was  proved  by  Bentley  and  othei*s  on 
the  trial. 

On  the  7th  of  June,  18.39,  the  plaintiffs'  attorney  called  on  the  defend- 
ants, and  asked  to  have  the  money  refunded,  notifying  them  at  the  same 
time  of  the  forgery. 

When  the  plaintiffs  offered  Bentley  as  a  witness,  the  defendants  objected, 
insisting  that  he  was  incompetent,  as  being  interested.  The  objection  was 
overruled,  and  Bentley  permitted  to  testify;  whereupon  the  defendants 
excepted. 

The  defendants  offered  to  prove,  and  the  ])laintiffs  admitted,  that  they 
(defendants)  received  the  draft  from  the  Bank  of  New  York  to  collect,  as 
agents  for  the  latter,  and  that  as  such  they  received  the  money  and  paid  it 
over  to  their  principals,  before  notice  of  the  forgery.  The  defendants,  how- 
ever, never  disclosed  their  agency  to  the  plaintiffs  till  called  on  by  the 
plaintiffs'  attorney,  as  above  mentioned,  and  notified  of  the  forgery. 

The  defendants  further  offered  to  show  a  uniform  custom  of  the  banks 
of  this  State,  to  receive  and  collect  drafts  in  the  manner  this  was  done, 


232  CANAL   BANK   V.   BANK   OF  ALBANY.  [CHAP.  IL 

without  disclosing  their  agency.  The  plaintiffs  objected,  on  the  ground  of 
irrelevancy,  and  the  judge  overruled  the  offer,  to  which  the  defendants 
again  excepted. 

A  verdict  having  been  rendered  for  the  plaintiffs,  the  defendants  now 
moved  for  a  new  trial  on  a  bill  of  exceptions,  presenting  the  above,  and 
some  other  points. 

S.  Stevens  for  the  defendants. 

/.  Harris  for  the  plaintifls. 

By  the  Court,  Cowen,  J.  It  is  not  perceived  what  advantage,  direct  or 
remote,  Bentley  can  derive  from  the  plaintiffs'  recovery,  nor  what  he  can 
lose  by  their  failure.  It  is  said,  the  plaintiffs  will  hold  the  money  to  be 
recovered  in  trust  for  the  witness.  This  is  not  so.  Their  recovery  or 
failure  will  neither  add  to  nor  take  from  their  liability  to  him.  Their  re- 
covery will  not,  as  the  defendants'  counsel  supposes,  estop  them  to  deny 
that  Bentley's  name  was  forged.  The  record  and  proceedings  here  would 
not,  as  such,  be  any  evidence  whatever  between  him  and  the  plaintiffs. 
The  whole  is  but  a  more  solemn  admission  of  the  forgery ;  and  his  being 
sworn  as  a  witness  adds  nothing  to  its  strength  in  his  favor.  Should  he 
sue  the  Montgomery  County  Bank,  and  should  they  plead  payment,  they 
would  have  the  same  right  to  contest  the  forgery  as  if  this  suit  had  never 
been ;  nor  could  any  of  the  proceedings  here  be  used  as  evidence  against 
the  witness,  even  though  the  plaintiffs  shoidd  fail  to  establish  the  forgery 
against  these  defendants. 

On  the  merits,  there  was  nothing  in  the  nature  of  the  transaction  to  con- 
clude the  plaintiffs  against  showing  the  forgery.  They  had  done  no  act 
giving  currency  to  the  bill  on  the  strength  of  Bentley's  name.  Even  had 
they  accepted  it  on  the  day  when  it  was  drawn,  the  defendants  could  have 
holden  them  concluded  only  in  respect  to  the  genuineness  of  the  drawer's 
name,  he  being  their  immediate  correspondent.  ^  And  the  act  of  payment 
could  amount  to  no  more.-'  Neither  acceptance  nor  payment,  at  any  time, 
nor  under  any  circumstances,  is  an  admission  that  the  first,  or  any  other 
indorser's  name  is  genuine.^  In  point  of  title,  then,  the  case  of  the  defend- 
ants was  the  same  as  if  the  name  of  Bentley  had  not  appeared  on  the  bill. 
They  have  obtained  money  of  the  plaintiffs  without  right,  and  on  the  ex- 
hibition of  a  forged  title  as  a  genuine  one.  The  plaintiffs  paid  their  money 
under  the  mistaken  belief  thus  induced,  that  the  name  was  genuine.  To  a 
note  or  bill  payable  to  order,  none  but  the  payee  can  assert  any  title  with- 
out the  indorsement  of  such  payee  ;  not  even  a  bona  fide  holder.^ 

But  it  is  said,  the  equities  of  the  parties  are  equal,  and  the  defendants 
having  possession  must  prevail.  No  doubt  the  parties  were  equally  inno- 
cent in  a  moral  point  of  view.  The  conduct  of  both  was  bona  fide,  and  the 
negligence  or  rather  misfortune  of  both  the  same.     It  was  the  duty,  or, 

1  Chit.  Bills,  7  Am.  Ed.  ?36.  2  chit.  Bills,  7  Am.  Eil.  623. 

8  Chit.  Bills,  7  Am.  Ed.  286,  286,  a,  430. 


SECT.  I.]  CANAL   BANK   V.   BANK   OF   ALBANY.  233 

more  properly,  a  mcLisure  of  priuicucc,  in  each  to  have  inquired  into  the 
forgery,  which  both  omitted.  But  this  raises  no  preference  at  law  or  equity 
in  favor  of  the  defendants,  but  against  them.  They  have  obtained  the 
plaintiffs'  money  without  consideration  ;  not  as  a  gift,  but  under  a  mistake. 
Fur  the  ver}'  reason  th:it  the  parties  were  equally  innocent,  the  plaintiils 
have  the  right  to  recover ;  and  that  was  conceded  throughout,  in  the  au- 
thority cited  on  another  point  by  the  defendants'  counsel.  United  States 
Eauk  V.  Bank  of  Georgia.^  The  whole  course  of  argument  and  authority  in 
that  case  went  on  the  fault  of  the  party  who  paid  the  money.  It  was 
likened  to  the  case  of  a  bank  paying  a  check,  on  which  the  name  of  the 
drawer  was  forged,  which  was  again  assimilated  to  the  acceptance  of  a  bill 
of  exchange,  where  the  drawer's  name  is  forged.  It  was  said  that,  in  such 
cases,  the  payor  or  acceptor  takes  upon  himself  the  knowledge  of  his  cor- 
respondent's handwriting,  and  shall  be  concluded.  Even  that  is  going  a 
great  way,  imless  some  bo7ia  fide  holder  has  purchased  the  paper  on  the 
faith  of  such  an  act.  But  it  is  sufficient  to  distinguish  the  case,  that  it 
goes  on  the  superior  negligence  of  the  party  paying  or  accepting.  At  page 
3.55,  the  court  draws  an  express  distinction  between  the  effect  of  acceptance 
or  payment  as  a  recognition  of  the  drawer's  and  the  indorser's  handwrit- 
ing. It  is  said,  the  forgery  of  an  indorsement  is  not  a  fact  which  the  ac- 
ceptor is  presumed  to  know.  And  perhaps  the  decision  in  the  case  cited 
should  be  rested  entirely  on  negligence  in  the  Bank  of  Georgia.  United 
States  Bank  v.  Bank  of  Georgia ;  ^  also  the  case  of  the  Gloucester  Bank  v. 
The  Salem  Bank.' 

But,  it  is  said,  the  plaintiffs  here  delayed  giving  notice  of  the  forgery, 
from  the  28th  of  March  till  the  7th  of  June.  Under  what  circumstances, 
is  not  disclosed  ;  for  the  point  of  delay  was  not  made  at  the  trial.  That  is 
a  sufficient  reason  why  it  should  not  be  listened  to  here.  But  I  am  not 
willing  to  concede  that  delay  in  the  abstract,  as  seems  to  be  supposed,  can 
deprive  the  party  of  his  remedy  to  recover  back  money  paid  under  the  cir- 
cumstances before  us.  It  is  said,  the  defendants  had  indorsers  behind 
them ;  and  by  delay,  they  were  prevented  from  charging  them,  by  giving 
seasonable  notice.  Admit  this  to  be  so ;  the  plaintiffs  did  not  stand  in  the 
relation  of  a  holder.  They  were  the  dmwees,  and  advanced  the  money  by 
way  of  payment.  They  would  never,  therefore,  think  of  notice  to  the  de- 
fendants, till  they  accidentally  discovered  the  forgery.  If  there  had  been 
any  mireasonable  delay  after  such  discovery,  another  question  would  bo 
presented.  I  infer  from  the  rigor  of  the  case  cited  by  the  defendants' 
counsel.  Cocks  v.  Mastcrman,^  that  he  would  exact  as  great,  indeed  greater 
diligence  in  giving  notice,  than  is  necessary  to  fix  an  indorser.  There, 
the  plaintiffs  had  paid  to  the  defendants,  the  holders,  an  acceptance,  pur- 
porting to  be  in  tlie  name  of  the  plaintiffs'  customers.     The  bill  was  drawn 

»  10  Wheat.  33.3,  354.  «  10  Wheat.  844. 

»  17  Mass.  33,  cited  ;  10  Wheat.  350.  «  9  B.  &  C  902. 


234  CANAL   BANK   V.   BANK   OF   ALBANY.  [CHAP.  IL 

payable  at  the  plaintiffs'  bank.  The  next  day,  discovering  the  forgery, 
they,  on  the  same  day,  gave  notice  to  the  defendants  and  the  indorsers. 
This  was  held  too  late.  The  court  even  declined  to  give  an  opinion, 
whether  notice  on  the  very  day  of  payment  would  have  entitled  the  plain- 
tiffs to  recover ;  but  held,  that  notice  on  the  very  day  was  at  all  events 
necessary,  and  that  short  of  this  the  plaintiffs  were  not  entitled  to  recover. 
They  said,  the  holder  must  not,  by  want  of  notice,  be  deprived  of  the  right 
to  take  steps  against  the  parties  to  the  bill,  on  the  very  day  when  it  was 
paid ;  and  they  admitted  that  this  was  requiring  one  day's  increased  dili- 
gence, beyond  wliat  would  have  been  required  in  the  ordinary  case  of  dis- 
honor. In  the  latter  case,  they  allowed  that  notice  on  the  next  day  would 
have  been  in  season.  In  a  previous  case  of  payment  under  the  like  circum- 
stances, notice  having  been  given  on  the  very  day,  the  bankers  who  paid 
for  their  customers  were  allowed  to  recover.  Wilkinson  v.  Johnston.^  In 
this  earlier  case,  the  payment  was  made  for  the  honor  of  indorsers,  whose 
bankers  the  plaintiffs  were.  Both  cases  were  treated  by  the  court  as 
standing  on  the  same  principles,  though,  in  the  later  case,  they  do  not  put 
it  distinctly  on  any  principle.  In  the  earlier  case,  they  said  the  plaintiffs 
were  not  the  drawees,  or  acceptors,  nor  the  agents  of  any  supposed  accept- 
ors. The  same  thing  may,  I  take  it,  be  said  of  the  later  case,  though  the 
plaintiffs  assumed  to  pay  for  the  acceptors.  They  could  scarcely  have 
intended  to  pay  as  mere  agents  for  the  acceptors,  an  act  which  would  have 
extinguished  the  bill,  and  cut  them  off  from  a  remedy  against  the  drawers 
and  indorsers.  Where  a  bill  or  note  is  payable  at  a  bank,  and  no  express 
direction  given  by  the  principal  to  the  bank,  on  its  coming  in  with  indors- 
ers, the  bank,  of  course,  takes  the  paper  as  a  purchaser  or  holder ;  and  for 
its  own  indemnity,  presents  it  to  the  principal  for  payment  on  the  very 
day,  or  as  soon  as  may  be.  Thus,  there  is  a  good  chance  to  detect  the 
forgery  of  his  name ;  and  hurry  the  notices  to  the  other  parties.  What- 
ever forgeries  there  may  be,  are  soon  brought  to  light.  In  the  earlier  of 
the  two  cases  cited,  the  court  said,  "  The  general  rule  of  law  is  clear  and 
not  disputed,  viz.,  that  money  paid  under  a  mistake  of  facts  may  be  re- 
covered back  as  being  paid  without  consideration."  In  the  later  case,  the 
court  do  not  deny  the  rule,  nor  that  it  would  apply  to  the  case  before  thciii. 
But  to  enforce  it,  they  require  an  almost  impracticable  diligence.  I  douht 
whether  this  case  can  be  sustained,  except  upon  its  own  peculiar  circum- 
stances, if  it  can  be  sustained  at  all.  In  all  the  previous  cases,  where  a 
recovery  had  been  denied,  there  was  carelessness,  or  delay,  or  both.  Smith 
V.  ]Mercer,^  was  much  like  Cocks  v.  Masterman,  and  there  had  been  a  neg- 
lect to  discover  the  forgery  and  give  notice,  for  a  week's  time.  The  case 
of  Price  v.  Neal,^  was  one  of  palpable  neglect,  in  both  payment  and  delay. 
Some  other  cases  turn  on  similar  principles.  Barber  ^'.  Gingell ;  *  United 
States   Bank   v.  Bank  of  Georgia,  and    Gloucester  Bank  v.  Salem  Bank, 

1  3  B.  &  C.  428.  2  6  Taunt.  76.  ^  3  Burr.  1354.  *  3  Esp.  60. 


SECT.  I.]  CANAL   BANK   V.    BANK   OF  ALBANY.  235 

before  cited  ;  Levy  v.  Bank  of  United  States.^  If  Cocks  v.  ^Masterman  is  to 
be  followed,  it  must,  I  think,  be  on  the  same  principle.  The  plaiutifts 
paid  on  the  faith  of  their  correspondents*  name.  The  former  were  not 
named  as  drawees ;  but  they  had  a  superior  knowledge  of  their  correspond- 
ents' handwriting,  which  they  neglected  to  exert.  It  might,  therefore, 
have  been  reasonable  to  require  that  they  should  overcome  the  objection  of 
neglect,  by  such  a  speedy  movement  as  to  save  all  possible  advantages  to 
the  holder,  against  the  prior  parties.  But,  where  each  party  enjoys  only 
the  same  chance  of  knowledge,  no  case  demands  anything  more  than  rea- 
sonable diligence  in  giving  notice,  after  a  discovery  of  the  forgery.  The 
common  case  of  paying  forged  bank  notes,  is  one  instance.  And  navy  and 
victualling  bills  have  been  treated  as  standing  on  the  same  footing.  Jones 
V.  Ryde ;  "^  Bruce  v.  Bruce.*  These  are  cases  of  transferring  notes  from 
one  to  another,  which  turn  out  to  be  unavailable  b}'  reason  of  a  forgery,  in 
respect  to  which  both  parties  are  equally  ignorant,  the  one  being  no  more 
guilty  of  neglect  than  the  other;  indeed,  neither  being  negligent,  but  both 
being  imposed  upon  under  the  exercise  of  ordinary  diligence.  At  all 
events,  it  does  not  lie  with  the  paj-or  to  complain  of  the  very  neglect  im- 
putable to  himself.  ]S^eglect  to  give  notice,  after  discovering  the  forgery, 
is  another  matter.*  If  the  indorsers  are  to  be  charged,  as  such,  why  should 
not  the  accidental  delay  in  discovering  the  forgery,  on  a  paid  bill  especially, 
operate  as  an  excuse  for  not  giving  them  immediate  notice  *? 

The  defendants  did  not  disclose  their  agency,  and  must,  therefore,  as  be- 
tween them  and  the  plaintiffs,  be  taken  to  have  acted  as  principals.  They 
obtained  the  money  of  the  plaintiffs  on  a  bill  of  exchange,  payable  to  tlie 
order  of  Bentley,  under  a  forged  indorsement  of  his  name.  Money  has 
been  successively  paid  by  mistake  of  the  several  indorsees,  the  plaintiffs, 
the  defendants,  the  Bank  of  New  York,  etc.,  and  the  remedy  by  each  is 
plain.  It  is  by  action  over,  each  against  his  respective  indorser.  The  bill 
has  never  been  put  in  a  regular  course  of  negotiation,  for  want  of  Bentley's 
name.  No  one  who  has  advanced  money  on  it,  therefore,  obtained  what  he 
supposed  he  had  got ;  and  the  indorsers,  beside  being  liable  as  such,  may 
each  be  sued,  as  having  received  money  without  consideration. 

The  proof  offered  relative  to  the  custom  of  banks  to  collect  paper  re- 
ceived by  them  as  agents,  without  communicating  the  name  of  their  princi- 
pal, would  have  disclosed  a  case  in  which  it  would  be  apparent  that  tlic 
defendants  might  or  might  not  have  been  agents.  The  ol>ject  of  the  pro- 
posed proof  was,  to  supply  the  want  of  direct  evidence  tiiat  notice  of  the 
agency  had  been  given  by  them  at  the  time.  Till  they  had  superadded 
proof  of  another  custom,  for  banks  never  so  to  receive  paper  and  collect  as 
principals,  the  proposed  evidence  could  have  had  no  tendency  to  affect 
the  plaintiffs  with  such  notice.     Knowledge  that  the  defendants  might  bo 

1  1  I5inn.  27;  8.  c.  4  DalL  234.  *  5  Timnt.  488. 

8  5  Taunt.  4'J5,  note.  *  Chit.  Bills,  Am.  Ed.  4G3. 


236  BANK   OF   COMMERCE   V.   UNION   BANK  [CHAP.  IL 

acting  as  agents,  was  not  enough.     That  is  so  of  every  mau  ostensibly 

transacting  business  as  a  principal.     Mills  v.  Rant}     The  proof  offered 

and  rejected  was,  therefore,  irrelevant. 

Hew  trial  denied. 


THE  BANK   OF   COMMERCE  v.  THE  UNION   BANK. 

In  the  Court  of  Appeals  of  New  York,  April,  1850. 

[Reported  in  3  Comstock,  230.] 

The  Bank  of  Commerce  brought  assumpsit  in  the  Superior  Court  of  the 
City  of  New  York,  against  the  Union  Bank,  to  recover  money  paid  by 
mistake.     On  the  trial  before  Sanford,  J.,  the  case  was  this :  — 

On  the  18th  of  December,  1847,  the  New  Orleans  Canal  and  Banking 
Company  drew  a  draft  on  the  Bank  of  Commerce  in  New  York,  payable  to 
the  order  of  "J.  Durand,"  for  one  hundred  and  five  dollars.  After  the  draft 
was  issued  it  was  fraudulently  altered  in  several  respects,  and  among  others, 
by  the  substitution  of  the  word  "thousand"  for  "hundred,"  and  the  name 
"  Bonnet"  instead  of  "  Durand,"  so  that  it  appeared  to  be  a  draft  for  one 
thousand  and  five  (instead  of  one  hundred  and  five)  dollars,  and  payable 
to  the  order  of  J.  Bonnet  (instead  of  J.  Durand).  lu  this  altered  condition, 
and  bearing  the  indorsement  "J.  Bonnet,"  the  Union  Bank  in  New  York 
received  the  draft  from  the  State  Bank  of  Charleston  for  collection,  and 
credited  the  amount  to  that  bank.  The  Bank  of  Commerce,  on  the  draft 
being  presented  by  the  Union  Bank,  paid  it  to  the  latter.  Two  days  after- 
wai'ds  the  Bank  of  Commerce  received  advices  from  the  New  Orleans  Canal 
and  Banking  Company,  and  then  ascertained  the  alterations  in  the  draft. 
Thereupon  tlie  draft  was  returned  to  the  Union  Bank,  and  the  money,  which 
had  been  paid,  demanded  ;  but  payment  was  refused. 

The  evidence  being  closed,  the  court  charged  the  jury  that  if  they  were 
satisfied  the  draft  had  been  altered,  in  the  manner  before  mentioned,  after 
it  was  issued  by  the  drawers,  and  that  the  plaintiffs  paid  tlie  amount  of  it, 
as  altered,  by  mistake,  and  without  knowledge  of  or  reason  to  suspect  the 
alterations,  they  were  entitled  to  recover  the  amount  of  money  so  paid. 
Also  that  the  rule  requiring  a  banker  to  know  the  handwriting  of  his 
customer,  as  to  the  signature  to  a  check  or  draft,  did  not  extend  to  the 
filling  up  of  the  body  thereof;  and  that  paying  the  draft  in  question  imder 
the  circumstances  was  not  of  itself  evidence  of  any  negligence  or  want  of 
due  caution  on  the  part  of  the  plaintiffs.  There  was  an  exception  to  the 
charo-e,  and  to  the  refusal  of  the  court  to  charge  certain  propositions  as 
requested.     The  plaintiffs  had  a  verdict  for  $1035.38,  which  the  Superior 

1  20  Wend.  433. 


SECT.  I  ]  BANK   OF   COMMERCE   V.   UNION   BANK.  237 

Court  refused  to  set  aside,  and  after  judgment  the  defendants  appealed  to 
this  court. 

U.  Ketchum  for  appellants, 

B.  D.  Silliman  for  respondents. 

PiUGGLES,  J.,  delivered  the  opinion  of  the  court. 

The  payment  of  a  bill  of  exchange  by  the  drawee  is  ordinarily  an  admis- 
sion of  the  drawer's  signature,  which  he  is  not  afterwards,  in  a  controversy 
between  himself  and  the  holder,  at  liberty  to  dispute ;  and  therefore  if  the 
drawer's  signature  is  on  a  subsequent  day  discovered  to  be  a  forgery,  the 
drawee  cannot  compel  the  holder  to  whom  he  paid  the  bill,  to  restore 
the  money,  unless  the  holder  be  in  some  way  implicated  in  the  fraud.  Price 
V.  Neal.^  This  rule  is  founded  on  the  supposed  negligence  of  the  drawee 
in  failing  by  an  examination  of  the  signature,  when  the  bill  is  presented, 
to  detect  the  forgery  and  refuse  paj'ment.  The  drawee  is  supposed  to  know 
the  handwriting  of  the  drawer,  who  is  usually  his  customer  or  correspondent. 
As  between  him,  therefore,  and  an  innocent  holder,  the  payor,  from  this 
imputed  negligence,  must  bear  the  loss.  In  Price  v.  Neal,  the  plaintiff  had 
paid  to  Neal,  the  holder,  two  bills  of  exchange,  purporting  to  be  drawn  on 
him  by  Sutton,  whose  name  was  forged.  On  discovery  of  the  forgery.  Price 
brought  his  action  against  Neal,  to  recover  back  the  money  as  jiaid  by 
mistake.  Lord  Mansfield,  in  delivering  the  opinion  of  the  court  in  favor 
of  the  defendant,  said,  "  It  was  incumbent  npon  the  plaintiff'  to  be  satisfied 
that  the  bill  drawn  upon  him  was  the  drawer's  hand  before  he  accepted  or 
paid  it,  but  it  was  not  incumbent  upon  the  defendant  to  inquire  into  it." 
"Whatever  neglect  there  was,  was  on  his  side.  It  is  a  misfortune  which 
has  happened  without  the  defendant's  fault  or  neglect." 

In  "Wilkinson  v.  Lutwidge,^  Lord  Chief  Justice  Pratt  was  of  opinion 
that  "acceptance  was  a  sufficient  acknowledgment  of  the  drawer's  hand- 
writing on  the  part  of  the  acceptor,  who  must  be  supposed  to  know  the 
hand  of  his  own  correspondent."  So  the  acceptance  of  a  bill,  whether 
general,  or  for  honor,  or  sttpra  protest,  after  sight  of  the  bill,  admits  the 
geiniineness  of  the  signature  of  the  drawer;  and  conse(iucntly  if  the  sig- 
nature of  the  drawer  turns  out  to  be  a  forgery,  the  acceptance  will  never- 
theless be  binding,  and  entitle  a  boiia  jide  liolder  for  value  and  without 
notice  to  recover  thereon  according  to  its  tenor.' 

But  it  is  plain  that  the  reason  on  which  the  aliovc  rule  is  founded  docs 
not  apply  to  a  ca.se  where  the  forgery  is  not  in  counterfeiting  the  name  of 
the  drawer,  but  in  altering  the  body  of  the  bill.  There  is  no  ground  for 
presuming  the  body  of  the  bill  to  be  in  the  drawer's  handwriting,  or  in  any 
handwriting  known  to  the  acceptor.  In  the  present  case,  that  part  of  the 
bill  is  in  the  handwriting  of  one  of  the  clerks  in  the  office  of  the  Canal 
and  Banking  Company  in  New  Orleans.  The  signature  was  in  the  name 
and  handwriting  of  the  cashier.  The  signature  is  genuine.  Tlie  forgery 
1  3  Burr.  1351.  2  1  Stra.  G13.  »  Story  on  Bills,  §  2(52. 


233  BANK   OF   COMMERCE   V.   UNION   BANK.  [CHAP.  IL 

was  committed  by  altering  the  date,  number,  amount,  and  payee's  name. 
No  case  goes  the  length  of  saying  that  the  acceptor  is  presumed  to  know 
the  handwriting  of  the  body  of  the  bill,  or  that  he  is  better  able  than  the 
indorsers  to  detect  an  alteration  in  it.  The  presumption  that  the  drawee 
is  acquainted  with  the  drawer's  signature,  or  able  to  ascertain  whether  it 
is  genuine,  is  reasonable.  In  most  cases  it  is  in  conformity  with  the  fact. 
But  to  require  the  drawee  to  know  the  handwriting  of  the  residue  of  the 
bill,  is  unreasonaV)le.  It  would,  in  most  cases,  be  requiring  an  impossibility. 
Such  a  rule  would  be  not  only  arbitrary'  and  rigorous  but  unjust.  The 
drawee  would  undoubtedly  be  answerable  for  negligence  in  paying  an  altered 
bill,  if  the  alteration  were  manifest  on  its  ftxce.  Whether  it  was  so  or  not 
in  this  case  was  properly  submitted  to  the  jury,  who  found  that  it  was  paid 
by  mistake  and  without  knowledge  of,  or  reason  to  suspect  the  fraudulent 
alterations.  It  would  have  been  difficult  to  find  otherwise  upon  the  evi- 
dence, the  bill  having  passed  through  the  defendants'  bank,  and  the  Charles- 
ton bank  without  suspicion.  If  the  forgery  had  been  in  the  name  of  the 
drawer,  it  might  not  perhaps  have  been  incumbent  on  those  banks  to 
scrutinize  the  bill,  because  they  might  have  relied  on  the  drawee's  better 
knowledge  of  the  hand  ;  but  the  forgery  being  in  the  body  of  the  bill  the 
plaintiffs  were  not  more  in  fault  than  the  defendants. 

The  greater  negligence  in  a  case  of  this  kind  is  chargeable  on  the  party 
who  received  the  bill  from  the  perpetrator  of  the  forgery.  So  fixr  as  respects 
the  genuineness  of  the  bill  each  indorsee  receives  it  on  the  credit  of  tlie 
previous  indorsers ;  and  it  was  the  interest  and  duty,  in  the  present  case, 
of  the  Bank  of  Charleston,  to  satisfy  itself  that  the  bill  was  genuine,  or 
that  its  immediate  indorser  was  able  to  respond  in  case  the  bill  should  prove 
to  be  spurious.  The  party  who  fraudulently  passed  the  bill  cannot  avoid 
his  liability  to  refund  on  the  pretence  of  delay  in  detecting  the  forgery,  or 
in  giving  notice  of  it;  and  if  reasonable  diligence  is  exercised  in  giving 
notice  after  the  forgery  comes  to  light  it  is  all  that  any  of  the  parties  can 
require.     Canal  Bank  v.  The  Bank  of  Albany.* 

In  Smith  v.  Mercer,'^  in  Cocks  v.  Masterman,'  and  in  Price  v.  Neal,*  the 
plaintiffs  who  paid  the  forged  bills,  being  chargeable  with  a  knowledge  of 
the  signatui'e  of  the  drawer  (which  was  forged),  were  held  to  have  paid  it 
negligently  and  without  due  caution  and  examination,  and  on  that  ground 
it  was  that  the  defendants  to  whom  they  paid  the  money  were  held  not 
liable  without  inmiediate  notice  of  the  forgery.  But  in  the  present  case, 
no  such  negligence  is  imputable  to  the  plaintiffs,  the  plaintiffs  being  no 
more  capable  of  detecting  the  forged  alteration  by  inspection  of  the  bill, 
than  either  of  the  other  parties. 

This  action  is  not  founded  on  the  bill  as  an  instmment  containing  the 
contract  on  which  the  suit  is   brought.     The   acceptor   can   never   have 

1  1  Hill,  287,  292,  3.  2  q  Taunt.  76. 

8  9  B.  &  C.  902.  *  3  Burr.  1354. 


SECT.  l]        GODDARD  V.   THE  MERCHANTS'  BANK.  239 

recourse  on  the  bill  against  the  indorsers.     But  the  plaintiffs'   right   of 

recovery  rests  on  equitable  grounds.     lu  The  Canal  Bank  v.  The  Bank  of 

Albany,  the  principle  was  recognized  that  money  paid  ,by  one  party  to 

another  through  mutual  mistake  of  facts  in  respect  to  which  both  were 

equally  bound  to  inquire,  may  be  recovered  back.     The  defendants  here  as 

in  that  case  have  obtained  the  money  of  the  plaintiffs  without  right  and  on 

the  exhibition  of  a  forged  title  as  genuine,  the  forgery  being  unknown  to 

both  parties.     The  defendants  ought  not  in  conscience  to  retain  the  money, 

because  it  does  not  belong  to  them  ;  and  fur  the  further  reason  that  the 

defendants  and  the  previous  indorsers  have,  each,  on  the  same  principle, 

their  remedy  over  against  the  party  to  whom  they  respectively  paid  the 

money,  until  the  wrongdoer  is  finally  made  to  pay.     If  that  party  should 

be  irresponsible,  or  if  he  cannot  be  found,  the  loss  ought  to  fall  on  the 

party  who,  without  due  caution,  took  the  bill  from  him. 

In  cases  where  no  negligence  is  imputable  to  the  drawee  in  failing  to 

detect  the  forgery,  the  want  of  notice  within  the  ordinary  time  to  charge 

the  previous  parties  to  the  bill,  is  excused,  provided  notice  of  the  forgery 

be  given  as  soon  as  it  is  discovered.^ 

J2idgme7it  affirmed. 


GODDARD  V.   THE  MERCHANTS'  BANK. 

In  the  Court  of  Appeals  of  New  York,  October,  1850. 

[Reported  in  4  Comstock,  147.] 

Appeal  from  the  Superior  Court  of  the  city  of  New  York,  where  Goddard 
and  St.  John  brought  assumpsit  against  the  Merchants'  Bank,  to  recover 
back  money  paid  by  mistake.  On  the  15th  of  September,  1847,  a  man 
calling  himself  E.  S.  Moore  presented  to  the  Bank  of  Rutland,  in  Vermont, 
a  draft  as  follows  :  — 

jlOOO.  Cleveland,  Ohio,  Aug.  28,  1847. 

Canal  Bank,  ,    ,  „  , 

Pay  to  order  of  E.  S.  Moore,  one  thousand  dollars,  value  re- 
ceived, which  place  to  the  account  of 

S.  H.  Mann,  Cashier. 

To  American  Exchange  Bank,  N.  Y. 
No.  214. 

The  man  calling  himself  Moore  indorsed  the  draft  to  the  Bank  of  Rut- 
land, and  received  $1000  for  it.  He  was  not  seen  or  heard  of  afterwards, 
and  his  residence  was  unknown.     The  drawer's  name  to  the  draft  was  forged. 

The  Bank  of  Rutland  sent  the  draft,  for  collection,  to  the  Farmers'  Bank 

1  Espy  V.  Bank  of  Cincinnati,  18  Wall.  604  ;  White  v.  Continental  National  Bank, 
64  N.  Y.  316,  accord.     Conf.  Langton  v.  Lazarus,  5  M.  &  W.  629.  —  El). 


240  GODDAKD  V.   THE  MERCHANTS'  BANK.        [CHAP.  II. 

of  Troy,  and  that  bank  forwarded  it  for  collection  to  the  defendants'  bank 
in  New  York,  hj  -which  it  was  received  on  Saturday,  Sept.  18,  1847.  Ou 
the  same  day  the  defendants  placed  the  draft  in  the  hands  of  Mr.  Campbell, 
a  notary,  who  presented  it  for  payment  at  the  American  Exchange  Bank 
(the  drawees) ;  the  teller  of  which  refused  payment  for  want  of  funds  of  the 
drawer.  The  plaintiffs,  Goddard  &  St.  John,  were  the  correspondents  in 
New  York  of  the  Canal  Bank  at  Cleveland  ;  and  on  Monday  morning, 
Goddard  called  at  the  office  of  the  notary  where  the  draft  was,  and  left  his 
check  for  the  amount,  but  did  not  then  see  the  draft,  in  consequence  of  the 
absence  of  the  notary.  On  the  following  day,  Goddard,  on  seeing  the 
draft  pronounced  it  a  forgery.  Notice  was  immediately  given  to  the  de- 
fendants, and  repayment  of  the  money  demanded,  which  they  refused. 
The  circumstances  attending  the  payment  of  the  draft,  and  affecting  the 
question  of  negligence  on  the  part  of  the  plaintiffs,  are  sufficiently  detailed 
in  the  opinion  of  Bronson,  J. 

The  plaintiffs  recovered  in  the  Superior  Court,  and  the  defendants  ap- 
pealed to  this  court. 

B.  W.  Bonney  for  appellants. 

H.  E.  Davies  for  respondent. 

Bronson,  C.  J.,  delivered  the  opinion  of  the  court. 

The  drawee  of  a  bill  is  held  bound  to  know  the  handwriting  of  his  cor- 
respondent, the  drawer  ;  and  if  he  accepts  or  pays  a  bill  in  the  hands  of  a 
bona  fide  holder  for  value,  he  is  concluded  by  the  act,  although  the  bill 
turns  out  to  be  a  forgery.  If  he  has  accepted,  he  must  pay ;  and  if  he  has 
paid,  he  cannot  recover  the  money  back.  This  is  an  exception  to  the 
general  rule,  that  money  paid  under  a  mistake  of  fict  may  be  recovered 
back.  The  exception  is  fully  established ;  but  I  do  not  see  that  it  applies 
to  this  case.  As  the  plaintiffs  intervened  and  paid  the  bill  for  the  honor  of 
the  supposed  drawers,  I  do  not  doubt  that  the  exception  would  have  ap- 
plied to  them,  as  well  as  to  the  drawees,  had  they  seen  the  bill  before  they 
parted  with  their  money  ;  but  they  had  not  seen  it.  They  had  had  no 
opportunity  of  judging  whether  the  bill  was  in  the  handwriting  of  their 
correspondents,  the  drawers,  or  not  ;  and  consequentlj^  the  argument  which 
concludes  the  drawee  when  he  pays  after  sight  of  the  bill  proves  nothing 
against  the  plaintiffs.  Their  case  is  out  of  the  exception,  and  within  the 
general  rule  ;  and  I  see  no  reason  why  they  should  not  recover. 

But  it  is  said  that  the  plaintiffs  are  chargeable  with  negligence,  in  pay- 
ing the  draft  before  they  had  seen  it;  also  that  they  prevented  the  service, 
of  notices  of  protest  on  Monday  the  20th  of  September,  the  last  day  for 
giving  notice  ;  and  consequently  they  cannot  recover.  How  are  the  facts  1 
The  plaintiffs  were  informed  on  the  Monday  morning  in  question  that 
there  was  a  draft  for  $1000  drawn  by  their  correspondents,  the  Canal  Bank 
of  Cleveland,  on  the  American  Exchange  Bank  ;  that  it  had  been  protested 
on  Saturday,  and  was  theu,  in  the  hands  of  Notary  Campbell.     This  infer- 


SECT.  I.]        GODDARD  V.   THE  MERCHANTS'  BANK.  241 

mation  they  got  from  the  teller  of  the  American  Exchange  Bank,  the  teller 
of  the  Merchants'  Bank,  and  from  Mr.  Riker,  another  notary,  who  occupied 
the  same  office  with  Mr.  Campbell,  and  who  received  papers  and  answered 
questions  fur  ^Ir.  Campbell  when  he  was  absent  from  the  office,  as  he  was 
when  Goddard,  one  of  the  plaintiffs,  called  to  take  up  the  draft.  On  this 
information  Goddard  acted  ;  and  supposing  that  the  Canal  Bank  had  by 
mistake  drawn  on  the  Exchange  Bank,  with  which  it  had  just  before  kept 
an  account,  instead  of  drawing  on  the  plaintiffs,  and  wishing  to  protect  the 
credit  of  the  drawers,  he  left  a  check  with  Mr.  Hiker  for  the  amount  of  the 
draft  and  notary's  fees,  for  the  purpose  of  taking  up  the  draft,  and  re- 
quested to  have  it  sent  to  the  plaintiffs'  office  on  that  day,  which  Mr.  Biker 
said  would  be  done,  or  that  he  would  tell  Mr.  Campbell  that  the  plaintiffs 
wanted  the  draft  sent  down.  Eiker  delivered  the  check  and  did  the  er- 
rand when  Campbell  came  in.  Campbell  took  the  check  and  paid  the 
money  to  the  defendants ;  but  instead  of  sending  the  draft  to  the  plaintiffs, 
he  put  it  in  his  trunk  and  kept  it  until  Tuesday  morning,  when  Goddard 
called  and  inquired  for  it.  On  seeing  the  draft  Goddard  immediately  pro- 
nounced it  a  forgery,  and  thereupon  went  to  the  defendants'  bank  and  de- 
manded back  the  money.  Now  in  all  this  I  am  unable  to  see  anything 
like  culpahle  negligence  on  the  part  of  Goddard.  lie  was  told  that  there 
was  such  a  draft,  —  importing,  of  course,  that  it  was  a  genuine  draft.  He 
got  the  information  from  the  defendants'  teller,  and  also  from  Mr.  Riker, 
who  received  papers  and  answered  questions  for  Mr.  Campbell,  to  whose 
hands  the  defendants  had  intrusted  the  draft.  But  it  is  not  necessary  to 
connect  the  defendants  with  the  information.  When  Goddard  went  to  the 
notary's  office,  he  told  Mr.  Riker  he  had  been  informed  —  not  by  the  sup- 
posed drawers,  but  by  persons  in  New  York  —  that  Mr.  Campbell  had  a 
draft  in  his  hands  drawn  by  the  Canal  Bank  of  Cleveland  ;  and  he  left  a 
check  to  take  up  such  a  draft,  —  meaning  of  course  a  genuine  draft.  Neither 
Campbell  nor  his  principals,  the  defendants,  had  any  right  to  the  check, 
except  for  the  purpose  of  taking  up  a  genuine  draft  ;  and  when  Campbell 
received  the  check  and  paid  it  over  to  the  defendants,  both  he  and  they 
tacitly  affirmed  that  the  draft  was  genuine.  Independently  of  the  implied 
obligation  to  send  the  draft  to  the  i>laiiitiffs  on  that  day,  it  would  have 
been  an  act  of  prudence  on  the  [>!irt  of  the  defendants,  or  their  agent  the 
notar}',  to  send  it.  But  when  we  take  into  consideration  the  request  that 
the  draft  should  be  sent,  which  was  communicated  to  the  notary  when 
he  received  the  check,  it  is  clear  that  whatever  of  negligence  tliere  was 
in  the  transaction  was  all  on  the  other  side,  and  not  on  tlic  side  of  the 
plaintiffs. 

It  is  true  that  if  the  ])laintiffs  had  not  intervened,  the  notices  would  have 
been  sent  off  on  Monday,  which  was  in  time,  instead  of  Tuesday',  which 
was  too  late.  But  it  is  also  true  that  had  the  notary  performed  the  im- 
plied condition  on  which  he  received  the  check,  and  sent  the  draft  to  the 

16 


242  GODDAED  V.   THE  MERCHANTS'  BANK.       [CHAP.  II. 

plaintiffs  on  that  day,  he  would  either  have  learned  that  the  draft  was  a 
forgery  in  time  to  give  legal  notice,  or  the  plaintiffs  would  have  concluded 
themselves  by  holding  the  draft,  without  declaring  the  forgery,  until  it  was 
too  late  to  give  legal  notice. 

There  was  in  truth  no  use  in  giving  notice  of  the  dishonor  of  the  bill, 
with  the  view  of  charging  any  party  to  it.  The  defendants  only  had  it  for 
collection,  and  wanted  no  recourse.  Notice  to  the  supposed  drawers  could 
serve  no  purpose,  because  the  bill  was  a  forgery  :  and  Moore,  the  payee, 
who  forged  the  bill,  was  answerable  to  the  Bank  of  Eutlaud,  which  he  had 
defrauded,  without  notice. 

It  is  said  that  early  notice  would  have  increased  the  probability  of  catch- 
ing the  felon.  Let  us  examine  that  suggestion.  If  the  plaintifts  had  not 
intervened,  notice  would  have  been  sent  on  Monday  ;  but  it  would  have 
been  notice  of  protest,  and  not  of  the  forgery.  The  Bank  of  Rutland  would 
have  heard  nothing  about  a  forgery,  until  it  should  have  got  a  response 
from  the  notice  of  protest  sent  to  the  Canal  Bank  in  Ohio.  Thei*e  would 
have  been  a  delay  of  a  week  at  the  least.  Whereas  as  the  c;ise  was,  notice 
of  the  forgery,  as  well  as  of  protest,  was  sent  off  the  next  day,  both  to  the 
Bank  of  Rutland  and  the  Canal  Bank.  From  this  view  of  the  case  it 
seems  reasonable  to  believe,  that  what  was  in  fact  done  was  more  likely  to 
prove  beneficial  to  the  Bank  of  Rutland,  which  owned  the  bill,  than  the 
thing  which  would  have  happened  if  the  plaintiffs  had  done  nothing. 

But  whatever  may  be  the  probabilit}',  or  whoever  else  may  be  in  fault,  I 
think  the  plaintifts  have  neither  done  any  wrong,  nor  neglected  any  duty  ; 
and  am  of  opinion  that  the  judgment  should  be  affirmed. 

RuGGLES,  J.,  dissenting.  Acceptance  or  payment  of  a  bill  of  exchange 
or  check  by  the  drawee  is  an  admission  of  the  drawer's  signature,  which 
the  drawee  is  not  at  liberty  afterwards  to  contradict,  as  against  a  bona  fide 
holder  of  the  bill.  The  drawer  is  supposed  to  be  the  drawee's  correspond- 
ent and  acquaintance,  with  whose  signature  he  is  familiar,  and  negligence 
is  therefore  imputed  to  the  drawee  when  he  pays  a  bill  to  which  the  diaw- 
er's  name  is  forged.  The  duty  of  ascertaining  whether  the  drawer's  signa- 
ture is  genuine  before  acceptance  or  payment  by  the  drawee,  is  imposed  on 
him  for  the  benefit  and  safety  of  the  holder,  who  is  entitled  to  know  with- 
out delay  after  the  presentment  of  the  bill,  whether  it  is  accepted,  or  if 
payable  at  sight,  whether  it  is  paid.  This  knowledge  is  necessary  to  en- 
able the  holder  to  take  immediate  measures  against  the  previous  indorsers 
and  drawer,  who  are  liable  if  the  bill  be  dishonored. 

It  being  the  duty  of  the  drawee  to  satisfy  himself  of  the  genuineness  of 
the  bill  before  he  accepts  or  pays,  and  it  being  important  to  the  holder  and 
other  previous  parties  that  he  should  do  so,  it  is  settled  that  he  accepts  or 
pays  at  his  peril.  If  he  accepts  he  is  bound  to  pay,  although  the  drawer's 
signature  turn  out  to  be  forged  ;  and  if  he  pays  he  cannot  recover  back  his 
money,  unless  the  forgery  is  discovered  and  notice  given  immediately,  or 


SECT.  I.]        GODDARD  V.   THE  MERCHANTS'  BANK.  243 

within  sncli  time  as  to  give  the  holder  the  same  advantage  of  proceeding 
against  the  party  from  whom  he  received  the  bill,  as  if  it  had  been  dis- 
honored. Price  V.  Neal ;  ^  Smith  v.  Chester;'^  Smith  v.  Mercer;'  Wil- 
kinson V.  Johnston;*  Cocks  v.  Masterman.^  The  latter  case  seems  to 
enfurce  the  rule  with  too  much  rigor,  because  in  case  of  the  payment  of  a 
forged  bill,  it  requires  the  discovery  of  the  forgery  to  be  made  and  notice 
given  on  the  same  day,  so  as  to  give  to  the  holder  even  earlier  information 
of  the  forgery  than  he  would  have  been  entitled  to  upon  the  protest  of  the 
bill  for  non-payment. 

The  drawee  is  entitled  to  see  the  bill,  and  to  have  an  opportunity  to  ex- 
amine and  inspect  it,  and  if  necessary  to  inquire  as  to  the  drawer's  signa- 
ture, before  he  is  bound  to  accept  or  pay,  and  it  is  his  duty  to  exercise  a 
due  and  proper  caution,  not  only  for  his  own  sake  but  for  the  sake  of  the 
holder,  who  is  not  supposed  to  have  the  same  means  of  detecting  a  forgery 
in  the  drawer's  name,  as  are  possessed  by  the  drawee.  It  is  not  unreasona- 
ble to  require  the  drawee  to  ascertain  at  his  peril  whether  the  bill  is  genu- 
ine before  he  accepts  or  pays.  He  incurs  no  responsibility  to  the  drawer 
by  refusing  to  accept,  where  there  is  reasonable  ground  of  doubt ;  while  by 
accepting  or  paying  under  such  circumstances,  the  holder  is  induced  to 
release  his  vigilance  against  the  party  from  whom  he  took  the  bill,  and 
may  thereby  lose  the  opportunity  of  compelling  payment  from  him  in  case 
the  bill  should  turn  out  a  forgery.  The  rule,  therefore,  which  requires  that 
the  drawee  should  by  all  the  means  in  his  power  satisfy  himself  as  to  the 
drawer's  signature  before  he  accepts  or  pays,  being  reasonable  and  necessary, 
should  not  be  departed  from,  or  frittered  away  by  exceptions  resting  ou 
slight  grounds. 

The  plaintiffs  were  not  the  drawees  of  the  bill,  but  they  were  the  friends 
and  correspondents  of  the  supposed  drawers,  and  paid  the  bill  for  their 
honor.  They  stand  in  no  better  position  in  regard  to  the  point  in  ques- 
tion, than  if  they  had  been  the  drawee  ;  they  were  equally  bound  to  see 
and  examine  the  bill,  and  to  decide  at  their  peril  as  to  its  being  genuine. 
See  cases  above  referred  to.  They  were  no  more  entitled  than  the  drawees 
to  put  the  holder's  right  in  danger,  by  negligent  payment  of  a  forged  bill. 
When  Mr.  Goddard  paid  the  bill  he  knew  that  the  account  between  the 
Canal  Bank  of  Cleveland  and  the  American  Exchange  Bank  had  been 
closed.  This  appears  from  a  passage  in  his  letter  to  the  Canal  Bank,  of  the 
2 Ist  of  September.  The  fact  that  the  draft  purported  to  be  drawn  on  a 
bank  with  which  the  drawees  had  discontinued  their  dealings,  ought,  it 
seems  to  me,  to  have  awakened  the  suspicions  of  Mr.  Goddard  in  relation  to 
the  draft,  so  far  at  least  as  to  have  induced  him  to  look  at  it  before  he 
paid  the  money.  Instead  of  that,  however,  he  jjuid  it  without  having  seen 
it,  and  as  it  seems  to  me,  without  the  excuse  of  a  want  of  oppoitunity  to 

•  3  BiiiT.  13r.4.  2  1  T.  K.  6.-,4.  «  6  Tiunit.  76. 

*  3  B.  &  C.  428.  «  9  B.  &  C.  902. 


244  GODDAED  V.    THE  MERCHANTS'  BANK.        [CHAP.  II. 

see  it.  The  draft  was  presented  at  the  American  Exchange  Bank  for  pay- 
ment on  Saturday,  the  18th  of  September,  when  payment  was  refused. 
Having  heard  of  the  draft  from  the  teller  of  the  Merchants'  Exchange  Bank, 
and  ascertained  that  it  was  in  the  hands  of  the  notary,  he  called  at  the 
uotary's  office  on  Monday  morning  before  the  notary  had  come  in,  for  the 
purpose  of  paying  the  draft,  and  made  known  his  business  to  Mr.  Kiker, 
■whom  he  found  there.  He  was  requested  to  wait  a  few  minutes  until  the 
notary  came,  but  declined  doing  so,  and  left  his  clieck  with  Mi-.  Riker  to 
be  handed  to  the  notary  for  the  payment  of  the  draft,  requesting  that  the 
notices  of  protest  which  had  been  prepared  should  not  be  sent  out,  and 
they  were  withheld  accordingly.  The  plaintiff  might  witiiout  any  difficulty 
have  seen  the  bill.  It  was  not  withheld  by  the  notary.  The  plaintiff 
might  have  obtained  it  during  the  day  by  calling  or  sending  to  the  notary's 
office,  in  season  to  have  discovered  the  forgery  and  to  have  despatched  the 
notices  to  the  previous  parties.  It  is  true  the  notary  was  requested  to 
send  the  bill  to  the  plaintiff's  office,  and  that  this  was  nut  done  ;  but  this 
was  a  request  addressed  to  the  courtesy  of  the  notary,  and  not  a  demand 
which  he  had  a  right  to  make,  or  with  which  the  notary  was  bound  to  com- 
ply. If  Mr.  Goddard's  business  made  it  inconvenient  for  him  to  call  for 
the  bill,  it  might  be  equally  inconvenient  for  the  notary  to  send  it.  There 
was  no  obligation  on  the  part  of  the  notary  to  send  it.  Riker,  who  was  in 
the  notary's  office,  does  not  swear  that  he  promised  to  send  it,  or  told  him 
it  would  be  sent.  He  thinks  he  said  that  the  draft  would  be  sent  down,  or 
that  he  would  tell  the  notary  that  Goddard  wanted  it  sent  down.  This  is 
no  proof  of  a  promise  to  send  it;  and  Mr.  Goddard,  in  his  letter  to  the 
Bank  at  Cleveland,  states  that  he  requested  it  to  be  sent,  but  does  not  pre- 
tend that  Riker  undertook  to  send  it  or  held  out  any  expectation  that  it 
would  be  sent.  The  evidence  forms,  in  my  opinion,  no  excuse  to  the 
plaintiffs  for  not  having  exercised  the  usual  and  necessary  caution  of  look- 
ing at  the  bill  before  they  paid  the  money. 

The  plaintiff's  counsel  insist  that  negligence  in  paying  the  draft  unseen, 
is  not  imputable  to  the  plaintiffs,  because  payment  was  made  on  the  de- 
fendants' representation  through  their  agent,  the  notary,  that  there  was  a 
draft  of  the  Canal  Bank  in  existence  when  in  fact  there  was  not.  But  this 
reason  is  unsound.  The  holder  of  an  indorsed  draft,  as  we  have  before 
seen,  has  not  the  means  of  knowing  whether  the  drawer's  signature  is  genu- 
ine or  not ;  but  the  drawee  has.  The  holder  looks  to  the  drawee  for  in- 
formation on  that  point,  and  the  drawee  does  not  look  to  the  holder.  The 
drawee,  on  accepting  or  paying,  answers  that  inquiry  at  his  peril.  There 
was  in  fact,  in  this  case,  no  representation  that  the  draft  was  genuine. 
The  presentment  of  a  draft  is  not  such  a  representation.  If  it  were  so,  it 
would  always  excuse  payment  without  sight  of  the  paper,  and  would  sub- 
vert the  rule  on  this  subject  which  has  been  long  settled  and  rests  on  the 
soundest  reasons. 


SECT.  I  ]        GODDAKD  r.  THE  MERCHANTS*  BANK.  245 

"What  were  the  consequences  of  the  negligence  of  the  phiiutilTs,  in  paying 
the  bill  without  having  seen  the  hill  ?  The  forgery  was  discovered  on  the 
next  day,  as  soon  as  Mr.  Goddard  inspected  the  bill,  and  it  would  have  been 
detected  on  Monday,  before  payment,  if  he  had  acted  with  the  ordinajy 
caution,  of  seeing  the  bill  on  that  day,  as  he  might,  without  any  difficulty, 
have  done.  In  that  case,  it  would  have  \)een  the  notary's  duty  to  have 
i!iformed  the  Bunk  of  Rutland  of  the  forgery,  by  letter  of  the  same  day, 
and  this  we  are  to  presume  would  have  been  dune.  But  the  plaintiffs,  ou 
Monday,  paid  the  bill  without  having  seen  it,  and  thus  stopped  the  notice 
of  the  forgery ;  and  the  Bank  of  Rutland  lost  the  advantage  of  a  day's 
time  in  taking  measures  to  compel  the  repayment  of  the  money  from 
Moore.  The  delay  of  a  day  is  as  effectual  to  discharge  the  holder  of  a  bill 
under  such  circumstances,  as  the  delay  of  a  month  or  a  year.  It  is  only  iu 
those  cases  in  which  the  drawee  pays  the  bill  without  fault  on  his  part,  that 
the  failure  to  give  strict  notice  is  excused.  Such  was  the  case  in  The 
Canal  Bank  v.  The  Bank  of  Albany.  The  indorser's  name  was  iu  that  case 
forged,  and  the  drawee  had  no  better  opportunity  to  know  or  to  ascertain 
this  than  the  holders.  Both  stood  in  respect  to  the  exercise  of  vigilance, 
on  the  same  footing.  And  so  iu  the  case  of  The  Bank  of  Commerce  v.  The 
Union  Bank,  decided  at  the  last  term,  where  the  bod\^  of  the  bill  had  been 
altered,  but  the  signature  was  genuine,  it  was  held  that  negligence  was  not 
imputable  to  the  drawee  in  paying  the  bill,  because,  although  he  was  bound 
to  know  or  ascertain  the  verity  of  the  signature,  it  was  not  so  as  to  the 
body  of  the  bill,  as  to  which  it  was  no  more  incumbent  upon  him  than  upon 
the  holder,  to  discover  the  forgery.  Neither  of  those  cases  excuses  neglect 
on  the  part  of  the  drawee,  in  taking  the  usual  care  and  precaution  against 
paying  a  forged  bill.  Both  those  decisions  rest  on  the  ground  that  there 
was  no  negligence  or  fault  to  be  imjnited  to  the  drawees,  and  in  that  re- 
spect they  differ  entirely  from  the  present.  This  is  a  case  of  monc}'  paid 
by  mistake;  but  by  a  mistake  which  happened  through  the  negligence  of 
the  party  who  paid  it ;  a  mistake  which  in  cases  of  this  nature,  must  jeop- 
ardize the  rights  of  the  holder  of  the  bill,  and  which  for  that  reason  ought 
not,  on  grounds  of  ])ublic  policy,  to  be  made  the  foundation  of  a  claim  to 
have  the  money  restored.  Mistake  by  the  drawee  in  paying  n  forged  bill, 
without  negligence  on  his  part,  excuses  the  want  of  notice  uutil  the  forgery 
is  discovered.  But  mistake  arising  from  the  drawee's  carelessness  in  paying 
a  forged  bill  without  sight,  when  the  sight  of  the  bill  woidd  have  disclosed 
the  forgery,  is  no  excuse  for  the  want  of  notice  or  the  delay  in  giving  it. 

In  the  present  case,  it  is  evident,  that  if  Mr.  Goddard  had  looked  at  the 
bill  on  Monday,  the  20th  of  September,  the  forgery  would  have  been  dis- 
covered on  that  day  ;  and  the  Rutland  Bank  woidd  have  had  notice  iu; 
time  to  have  caused  the  arrest  of  Moore  at  Cleveland.  The  letter  whicli 
the  Rutland  liank  sent  to  the  bank  at  Cleveland,  describing  his  person,, 
arrived  there,  notwithstanding  the  delay  in  the  notice  of  the  forgery,  oui 


246        McKLEROY  V.    SOUTHERN  BANK  OF  KENTUCKY.    [CHAP.  11. 

the  same  day  that  a  person  answering  to  that  description  had  offered  a 
foro'ed  certificate  of  deposit  at  that  bank,  but  who  could  not  be  found  aftf  r 
the  arrival  of  the  letter.  Although  it  is  not  necessary  in  the  present  case 
to  show  that  the  Bank  of  Rutland  sustained  actual  damage  by  the  delay, 
this  circumstance  exemplifies  the  propriety  of  the  rule  which  requires  vigi- 
lance on  the  part  of  the  drawee,  for  the  benefit  and  safety  of  the  prior 
parties  to  the  bill. 

This  is  perhaps  a  hard  case  upon  the  plaintiffs ;  but  I  am  of  opinion  that 
they  cannot  be  permitted  to  recover,  without  overthrowing  valuable  and 
well-settled  principles  of  commercial  law. 

Jewett,  J.,  concurred  with  Ruggles,  J. 

And  thereupon  the  judgment  of  the  Superior  Court  was  affirmed. 


McKLEROY  v.   SOUTHERN  BANK  OF  KENTUCKY. 

In  The  Supreme  Court  of  Louisiana,  May,  1859. 

[Reported  in  14  Louisiana  Awiual  Eeports,  458.] 

Appeal  from  the  Fourth  District  Court  of  New  Orleans,  Price,  J. 

Clark  «&  Bayne  for  plaintiffs  and  appellants. 

Thomas  Uunton  for  defendants. 

Land,  J.     The  evidence  in  this  case  establishes  the  following  facts,  viz.  : 

The  plaintiffs  were  the  factors  of  James  Smith,  a  cotton  planter,  residing 
in  the  State  of  Arkansas.  One  John  Zimmer,  who  had  for  a  few  months 
been  a  private  tutor  in  Smith's  family,  assuming  the  name  of  John  Bel- 
mont, forged  a  draft  on  the  plaintiffs,  in  the  name  of  Smith,  as  follows :  — 


Homestead,  November  5th,  1857. 

On  the  15th  December,  1857,  pay  to  the  order  of  John  Belmont  nine 
hundred  and  eighty-six  dollars,  value  received,  and  charge  the  same  to  the 
account  of  Jas.  Smith. 

To  Messrs.  McKlekoy  &  Bradford,  New  Orleans,  La. 

Zimmer  also  forged  a  letter  of  introduction,  in  the  name  of  Smith,  to 
Shotwell  k,  Son,  of  Louisville,  Kentucky,  as  follows :  — 

Homestead,  Nov.  5,  1857. 
Messrs.  Shotwell  &  Son. 

Gentlemen  :  —  I  introduce  to  you  Mr.  John  Belmont,  a  gentleman  who 
resided  in  my  family  as  our  tutor.  Having  been  sick,  he  is  now  travelling 
to  improve  his  health.  I  gave  him  a  draft  on  McKleroy  &  Bradford,  my 
commission  house  in  New  Orleans,  which  he  is  desirous  to  get  cashed  in 


SECT.  l]    McKLEROY  V.   SOUTHERN  BANK  OF  KENTUCKY.       247 

your  city.  If  you  can  give  Mr.  Belmont  any  assistance,  by  perhaps  recom- 
mending my  draft,  as  Mr.  Belmont  is  a  stranger  in  your  city,  and  not  yet 
fully  recovered,  you  will  greatly  oblige  me. 

I  am,  gentlemen,  yours  respectfully, 

James  Smith. 

The  house  of  Shotwell  «k  Son  had  been  in  correspondence  with  James 
Smith  for  about  twelve  years ;  and  being  deceived  by  the  forger,  indorsed 
the  draft  for  the  purpose  of  enabling  the  holder  to  negotiate  it.  The  draft, 
bearing  the  indorsements  of  John  Belmont  and  of  Shotwell  Ji  Son,  was  pre- 
sented for  discount  at  the  Branch  of  the  Southern  Bank  of  Kentucky,  and 
being  considered  good,  was  purchased  by  the  bank.  The  draft  was  remitted 
to  the  Louisiana  State  Bank,  with  the  following  additional  indorsement 
upon  it,  —  "Pay  to  E.  J.  Palfrey,  cashier,  J.  B.  Alexander,  cashier."  The 
draft  thus  indorsed  was  presented  to  plaintiffs  for  acceptance  by  the  Louis- 
iana State  Bank,  and  was  accepted  on  the  last  of  November,  or  first  of 
December,  and  was  paid  at  maturity,  on  the  eighteenth  of  December,  1857, 
by  the  plaintiffs  to  the  agent  of  the  Southern  Bank  of  Kentucky,  In  Jan- 
nary,  1858,  James  Smith,  being  in  the  city,  made  known  to  the  plaintiffs, 
upon  an  examination  of  his  account  with  them,  that  the  draft  was  a  for- 
gery. Mr.  Shotwell,  of  the  house  of  Shotwell  &  Son,  was  in  this  city  at 
the  time,  and  was  immediately  sent  for,  and  the  fact  of  forgery  communi- 
cated to  him.  On  the  9th  of  January,  1858,  the  plaintiffs  gave  formal 
notice  by  letter,  of  the  forgery,  to  A.  L.  Shotwell  &  Son,  to  the  Southern 
Bank  of  Kentucky,  and  also  the  Louisiana  State  Bank. 

This  suit  was  instituted  by  the  plaintiffs  to  recover  back  the  money  paid 
on  the  draft,  on  the  ground  of  payment  in  error. 

There  was  judgment  for  the  defendant,  and  the  plaintiffs  have  appealed. 

The  District  Judge  held,  that  the  acceptance  of  a  bill  of  exchange  admits 
the  genuineness  of  the  drawer's  signature,  and  that  where  an  acceptor  has 
paid  to  a  bona  fide  holder  of  a  forged  draft  or  bill,  having  no  notice  of 
the  forgery,  he  cannot  recover  back  the  money  paid,  although  the  forgery 
is  established  by  the  most  conclusive  evidence.  And  where  one  of  two 
innocent  persons  must  suffer,  he  who  has  misled  the  other,  or  has  omitted 
his  duty,  must  bear  the  loss. 

These  principles  of  law  are  well  established,  and  admit,  perhaps,  of 
neither  doubt  nor  controversy,  and  if  applicable  to  this  case,  must  deter- 
mine the  rights  of  the  parties. 

The  defendant  became  the  holder  of  the  draft  before  it  was  accepted  by 
the  plaintiffs,  and  before  they  had  any  knowledge  of  its  existence,  and  con- 
sequently before  the  defendant  had  any  right  of  action  against  them  for  its 
recovery.  The  plaintiff's,  tliereforc,  had  done  no  act  wliich  induced  the 
defendant  to  believe  the  Hignature  of  the  drawer  to  be  genuine,  at  the  time 
tiie  bill  was  purchased.      How,  then,  can  it  be  said  that  the  defendant  pur- 


248       McKLEROY  V.   SOUTHERN  BANK  OF  KENTUCKY.   [CHAP.  II. 

chased  the  bill  on  the  faith  of  the  plaintiffs'  acceptance,  or  on  their  guaran- 
tee of  the  genuineness  of  the  drawer's  signature  1  Or  how  can  it  be  said 
that  the  plaintiffs  misled  tlie  defendant  at  the  time  of  the  purchase  of  the 
bill,  or  was  then  guilty  of  the  omission  of  any  duty  toward  the  defendant 
as  the  purchaser  of  the  bill  ] 

If  the  defendant  had  purchased  the  bill  on  the  faith  of  the  acceptance  of 
plaiutifis,  or  had  sustained  any  loss  in  consequence  of  their  negligence,  we 
would  have  no  difficulty  in  affirming  the  judgment  of  the  lower  court ;  but 
such  are  not  the  f\icts  made  known  to  us  by  the  record. 

The  defendant  purchased  the  bill  on  the  faith  of  the  indorsement  of 
Shotwell  &  Son,  which  was  a  warranty  of  the  genuineness  of  the  drawer's 
signature  to  the  bank ;  and  there  is  no  good  reason,  why  the  accidental 
payment  made  by  the  plaintifls  should  inure  to  the  benefit  of  the 
defendant. 

Mr.  Chitty  says  on  this  subject,  "If  he  [the  holder]  thought  fit  to  rely 
on  the  bare  representation  of  the  party  from  whom  he  took  it  [the  bill], 
there  is  no  reason  that  he  should  profit  by  the  accidental  payment,  when 
the  loss  had  already  attached  upon  himself,  and  why  he  should  be  allowed 
to  retain  the  money,  when,  by  an  immediate  notice  of  the  forgery,  he  is 
enabled  to  proceed  against  all  other  parties,  precisely  the  same  as  if  the 
payment  had  not  been  made,  and  consequently,  the  payment  to  him  has 
not  in  the  least  altered  his  situation,  or  occasioned  any  delay  or  prejudice. 
It  seems  that,  of  late,  upon  questions  of  this  nature,  these  latter  considera- 
tions have  influenced  the  court  in  determining  whether,  or  not,  the  money 
shall  be  recoverable  back ;  and  it  will  be  found,  on  examining  the  older 
cases,  that  there  were  fiicts  affording  a  distinction,  and  that  upon  attempt- 
ing to  reconcile  them  they  are  not  so  contradictory  as  might  on  first  view 
have  been  supposed."  ^ 

The  facts  in  this  case  affjrd  the  distinction  to  which  Mr.  Chitty  refers, 
and  takes  the  case  out  of  the  general  rule,  which  prevents  the  acceptor  of  a 
bill  of  exchange  from  recovering  back  the  money  paid  in  cases  of  forgery  of 
the  drawer's  signature. 

The  loss  had  already  attached  before  the  bill  was  either  accepted  or  paid, 
and  the  acceptors  gave  immediate  notice  to  the  defendant,  and  Shotwell  & 
Son,  after  ascertaining  for  the  first  time,  from  James  Smith,  in  whose  name 
the  bill  was  drawn,  the  fact  of  forgery. 

The  evidence  shows  that  plaintiffs  accepted  the  bill,  in  the  language  of 
the  witness,  "  chiefly  through  the  respectability  of  the  channels  through 
which  it  came."  It  is,  therefore,  difficult  to  conceive  upon  what  principle 
of  equity  or  right  the  defendant  can  be  permitted  to  retain  the  money  paid 
in  error  by  the  plaintiffs,  upon  the  facts  of  this  case.  No  authority  appli- 
cable to  the  particular  circumstances  of  this  case  has  been  cited  by  the 

1  Chitty  on  Bills,  464. 


SECT.  I.]  HOFFMAN   &    CO.    V.   BANK   OF   MILWAUKEE.  249 

dofendaut's  counsel,  and  we  have  no  hesitation  in  reversing  the  judgment 
upon  the  authority  of  Mr.  Chitty,  above  quoted. 

In  a  case  like  the  present,  the  acceptor  is  not  estopped  from  proving  the 
forgery  of  the  bill. 

It  is,  therefore,  ordered,  adjudged,  and  decreed,  that  the  judgment  of  the 
lower  court  be  avoided  and  reversed;  and  it  is  now  ordered,  adjudged,  and 
decreed,  that  the  plaintiffs  do  have  and  recover  of  the  defendant  the  sum  of 
nine  hundred  and  eighty-six  dollars,  with  five  per  cent  per  annum  interest, 
from  the  I8th  day  of  December,  1857,  with  costs  in  both  courts. 


HOFFMAN   &   CO.  v.  BANK   OF  MILWAUKEE. 
In  the  Supreme  Court  of  the  United  States,  December,  1870. 

[Reported  in  12  Wallace,  181.] 

Error  to  the  Circuit  Court  for  the  District  of  "Wisconsin  ;  the  case  being 
thus : — 

Chapin  &  Miles,  a  forwarding  and  commission  finn  in  Milwaukee,  were 
engaged  in  moving  ^iroduce  to  Hoffman  &  Co.,  of  Philadelphia,  for  sale 
there.  The  course  of  their  business  was  thus  :  They  first  shipped  the 
produce,  obtaining  a  bill  of  lading  therefor,  to  which  they  attached  a  draft 
drawn  by  them  on  their  consignee  for  about  the  value  of  the  grain,  and 
then  negotiated  the  draft  with  bill  of  lading  attached,  to  some  bank  in 
Milwaukee,  and  obtained  the  money.  It  was  understood  that  the  draft 
was  drawn  upon  the  credit  of  the  property  called  for  by  the  bill  of  lading, 
and  would  be  paid  by  the  consignee  upon  receipt  of  the  bill  of  lading ;  and 
—  with  perhaps  a  single  exception  where  the  bills  of  lading,  not  being 
obtained  during  bank  hours,  \yere  sent  otherwise  than  with  the  draft  —  the 
drafts  were  accompanied  by  such  bills.  The  Philadelphia  firm,  however, 
rarely  knew  wliat  flour  belonged  to  any  particular  bill  of  lading ;  not  being 
obliged  by  the  raihoad  clerks  at  Philadelphia,  where  they  were  known,  to 
exhibit  any  bill  of  lading  in  order  to  get  the  flour,  and  their  custom  being, 
on  getting  notice  from  the  railroad  office  that  flour  had  arrived  for  them, 
to  pay  the  charges,  give  receipts,  and  scud  their  drayman  for  it,  and  bring 
it  away.  It  was  the  practice  of  the  Milwaukee  firm  to  advise  their  Phila- 
delphia correspondents  by  letter  of  shipments  made  and  drafts  drawn,  a\  hich 
advisements  were  acknowledged  with  a  promise  "  to  honor  the  drafts." 
When  flour  was  "slow"  in  going  forward  tlioy  Cdrrcspondcd  with  the  Mil- 
waukee house  about  it,  but  did  not  on  that  account  refuse  acceptance  or 
payment  of  any  bill. 

Having  been  thiis  dealing  for  about  sixteen  months,  Chapin  &  Miles  drew 
three  drafts  on  Hoffman  &,  Co.,  in  the  ordinary  way,  and  attaching  to  them 


250  HOFFMAN    &    CO.   V.    BANK   OF   MILWAUKEE.  [CHAP.  II. 

bills  of  lading  which  they  had  forged,  negotiated,  in  the  ordinary  course  of 
business,  the  drafts,  with  the  forged  bills  of  lading  attached,  to  the  City 
Bank  of  Milwaukee,  getting  the  money  for  them.  The  bank  knew  nothing 
of  the  forgery  of  the  bills  of  lading.  The  ordinary  correspondence  between 
the  two  houses  took  place.  That  in  regard  to  one  draft  will  exhibit  its 
character. 

Milwaukee,  February  26th,  1869. 
Messrs,  Hoffman  &  Co.,  Philadelphia. 

Dear  Sirs,  —  We  ship  to  you  to-day  200  bbls.  "  Prairie  Flour,"  and 
draw  at  s't  for  $1100,  which  please  honor.  Will  draw  for  $5  only  when 
we  can,  but  must  crowd  $5  J  part  of  the  time. 

Yours,  truly, 

Chapin  &  Miles. 

Philadelphia,  March  2d,  1869. 
Messhs.  Chapin  &  Miles. 

Gentlemen,  —  Yours  26th  ult.  here.  Your  draft  $1100  will  be  paid, 
but  we  think  you  should  try  to  keep  them  down  to  $5  per  barrel.  We 
advise  sale  of  100  Prairie,  at  $7,  and  54,  at  $7.25. 

Yours,  respectfully, 

Hoffman  &  Co. 

No  flour  was  forwarded.  The  Milwaukee  bank  forwarded  the  drafts, 
however,  with  the  forged  bills  of  lading  attached,  to  their  correspondent, 
the  Park  Bank  in  New  York,  for  collection.  The  Park  Bank  forwarded  the 
same  to  its  correspondent,  the  Commonwealth  Bank  of  Philadelphia,  for 
the  same  purpose,  and  the  latter  bank  presented  the  draft  and  bill  of  lading 
to  the  drawees,  Hoffman  &  Co.,  who,  knowing  the  drafts  to  be  genuine,  and 
not  supposing  that  the  bills  of  lading  were  otherwise,  paid  the  drafts  to  the 
Philadelphia  Bank,  which  remitted  the  money  back  to  the  Park  Bank  to 
the  credit  of  the  Bank  of  Milwaukee. 

No  flour  coming  forward,  Hoffman  &  Co.  discovered  that  the  bills  of 
lading  were  forged,  and  Miles  &  Chapin  being  insolvent,  they  sued  the  Bank 
of  Milwaukee  to  recover  the  amount  paid,  as  above  stated. 

The  declaration  in  the  case  contained  the  common  counts  in  assumpsit, 
with  a  notice  attached  to  the  defendant,  "that  the  action  was  brought  to 
recover  $3100,  money  paid  by  the  plaintiff,  under  mistake  of  fact,  upon 
drafts  and  bills  of  lading  (of  which  copies  were  annexed),  the  mistake  being 
that  the  plaintiffs  paid  the  money  upon  the  belief  that  the  said  bills  of 
lading  were  genuine  instruments ;  whereas,  in  fact,  they  were  forged  ;  the 
amount  of  money  paid  being  the  amoimt  called  for  by  the  drafts,  which 
was  paid  upon  the  credit  and  inducement  of  the  bills  of  lading." 

Neither  the  name  of  the  defendant,  the  INIilwaukee  Bank,  nor  of  any  of 
its  officers  or  agents,  appeared  in  or  upon  the  bills  of  lading  in  question, 


SECT.  I.]  HOFFMAN   &.    CO.    r.    BANK   OF   MILWAUKEE.  251 

and  had  it  not  been  for  extrinsic  evidence,  it  could  not  have  been  told  from 
those  bills  that  the  bank  had  had  anything  to  do  with  tliem.  Nor  had  the 
bank  had  any  dealings  or  correspondence  of  any  kind  with  the  Pliiladclphia 
house,  relative  to  the  shipments  of  flour  by  Chapin  &  Wiles,  or  relative  to 
the  drafts  drawn  by  them. 

On  this  case  the  court  below  directed  the  jury  to  find  for  the  bank, 
defendant  in  the  case,  and  the  plaintiffs  brought  the  case  here. 
Mr.  M.  H.  Carpenter,  for  the  plaintiff  in  error. 
Mr.  J.  W.  Car]/,  for  the  defendant  in  error. 
Mr.  Justice  Clifford  delivered  the  opinion  of  the  court. 
Acceptors  of  a  bill  of  exchange,  by  the  act  of  acceptance  admit  the 
genuineness  of  the  signatures  of  the  drawers,  and  the  competency  of  the 
drawers  to  assume  that  responsibility.    Such  an  act  imports  an  engagement, 
on  the  part  of  the  acceptor,  to  the  payee  or  other  lawful  holder  of  the  bill, 
to  pay  the  same,  if  duly  presented,  when  it  becomes  due,  according  to  the 
tenor  of  the  acceptance.     He  engages  to  pay  the  holder,  whetlier  payee  or 
indorsee,  the  full  amount  of  the  bill  at  maturity,  and  if  he  docs  not,  the 
holder  has  a  right  of  action  against  him,  and  he  may  also  have  one  against 
the  drawer.     Drawers  of  bills  of  exchange,  however,  are  not  liable  to  the 
holder,  under  such  circumstances,  until  it  appears  that  the  bill  was  duly 
presented,  and  that  the  acceptor  refused   or  neglected  to  pay  the  same 
according  to  the  tenor  of  the  instrument,  as  their  liability  is  contingent 
and  subject  to  those  conditions  precedent. 

Three  bills  of  exchange,  as  exhibited  in  the  record,  were  drawn  by  Chapin, 
Miles  &  Co.,  payable  to  the  order  of  the  defendants,  and  the  record  shows 
that  they,  the  defendants,  received  and  discounted  the  three  bills  at  the 
request  of  the  drawers.  Attached  to  each  bill  of  exchange  was  a  bill  of 
lading  for  200  barrels  of  flour,  shipped,  as  therein  represented,  by  the 
drawers  of  the  bills  of  exchange,  and  consigned  to  the  plaintifis ;  and  the 
record  also  shows  that  the  drawers,  in  each  case,  sent  a  letter  of  advice  to 
the  consignees  apprising  them  of  the  shipment,  and  that  they  would  draw 
on  them  as  such  consignees  for  the  respective  amounts  specified  in  the 
several  bills  of  exchange.  Prompt  reply  in  each  case  was  communicated 
by  the  {jlaintifTs,  acknowledging  the  receipt  of  the  letter  of  advice  sent  by 
the  shippers,  and  promising  to  honor  the  bills  of  exchange,  as  therein 
requested.  Evidence  was  also  introduced  by  the  ijlaintifls  showing  that 
the  derendants  indorsed  the  bills  of  exchange  and  forwarded  the  same,  with 
the  bills  cf  lading  attached,  to  the  National  Park  Bank  of  the  City  of  New 
York,  their  regular  correspondent;  that  the  same  were  subsequently  in- 
dorsed by  the  latter  bank,  and  forwarded  to  the  Commonweulth  iiaiik  of 
Philadelphia  for  collection  ;  that  the  Commonwealth  Bank  presented  tho 
bills  of  exchange,  with  the  l)ills  of  lading  attached,  to  the  plaintilTs,  as  tho 
acceptors,  and  that  they  paid  the  respective  amounts  as  thoy  had  j)rovinusly 
promised  to  do,  and  that  the  Commonwealth  Bank  remitted  the  i)rocecd3 


252  HOFFMAN   &    CO.    V.    BANK    OF   MILWAUKEE.  [CHAP.  II. 

in  each  case  to  the  National  Park  Bank,  where  the  respective  amounts  were 
credited  to  the  defendants.     Proof  was  also  introduced  by  the  plaintiffs 
showing  that  each  of  the  bills  of  lading  was  a  forgeiy,  and  that  the  plaintiffs, 
before  the  commencement  of  the  suit,  tendered  the  same  and  the  bills  of 
exchange  to  the  defendants,  and  that  they  demanded  of  the  defendants, 
at  the  same  time,  the  respective  amounts  so  paid  by  them  to  the  Common- 
wealth Bank.     Payment  as  demanded  being  refused,  the  plaintiffs  brought 
an  action  of  assumpsit  against  the  defendants  for  money  had  and  received, 
claiming  to  recover  back  the  several  amounts  so  paid  as  money  paid  by 
mistake"  but  the  verdict  and  judgment  were  for  the  defendants,  and  the 
plaintiffs  sued  out  a  writ  of  error,  and  removed  the  cause  into  this  court. 
Testimony  was  also  introduced  by  the  defendants  tending  to  show  that  tlie 
shippers  were  millers ;  that  they  made  an  arrangement  with  the  plaintiffs 
to  ship  flour  to  them  at  Philadelphia  for  sale  in  that  market,  the  plaintiffs 
agreeing  that  they,  the  shippers,  might  draw  on  them  for  advances  on  the 
flour,  to  be  reimbursed  out  of  the  proceeds  of  the  sales ;  that  for  more 
than'a  year  they  had  been  in  the  habit  of  shipping  flour  to  the  plaintiffs 
under  that  arrangement  and  of  negotiating  drafts  on  the  plaintiffs  to  the 
banks  in  that  city,  accompanied  by  bills  of  lading  in  form  like  those  given 
in  evidence  in  this  case  ;  that  the  drafts,  with  the  bills  of  lading  attached, 
were  sent  forward  by  the  banks,  where  the  same  were  discounted,  and  that 
the  same  were  paid'  by  the  plaintiffs ;  that  the  drawers  of  the  drafts  in 
every  case  notified  the  plaintiffs  of  the  same,  and  that  the  plaintifis,  as  in 
this  case,  answered  the  letter  of  advice  and  promised  to  pay  the  amount. 
They  also  proved  that  the  drawers  of  the  drafts  in  this  case  informed  their 
cashier  that  the  same  would  always  be  drawn  upon  property,  and  that  the 
bills  of  lading  would  accompany  the  drafts,  and  that  they  had  no  knowledge 
or  intimation  that  the  bills  of  lading  were  not  genuine.     Instructions  were 
requested  by  the  plaintiffs,  that  if  the  jury  found  that  the  respective  bills 
of  lading  were   not  genuine,  they  were  entitled  to   recover   the   several 
amounts  paid  to  the  Commonwealth  Bank,  with  interest;  but  the  court 
refused  to  give  the  instruction  as  prayed,  and  instructed  the  jury  that  if 
they  found  the  facts  as  shown  by  the  defendants,  the  plaintiffs  could  not 
recover  in  the  case,  even  though  they  should  find  that  the  several  bills  of 
lading  were  a  forgery. 

Money  paid  under  a  mistake  of  facts,  it  is  said,  may  be  recovered  back 
as  having  been  paid  without  consideration,  but  the  decisive  answer  to  that 
suggestio°n,  as  applied  to  the  case  before  the  court,  is  that  money  paid,  as 
in  "this  case,  by  the  acceptor  of  a  bill  of  exchange  to  the  payee  of  the  same, 
or  to  a  subsequent  indorsee,  in  discharge  of  his  legal  obligation  as  such,  is 
not  a  payment  by  mistake  nor  without  consideration,  unless  it  be  shown 
that  the  instrument  was  fraudulent  in  its  inception,  or  that  the  considera- 
tion was  illegal,  or  that  the  facts  and  circumstances  which  impeach  the 
transaction,  as  between  the  acceptor  and  the  drawer,  were  known  to  the 


SECT.  I.]  HOFFMAN    &    CO.   V.    BANK    OF   MILWAUKEE.  253 

payee  or  subsequent  indorsee  at  the  time  he  became  the  holder  of  tlie 
instrument.^ 

Such  an  instrument,  as  between  the  payee  and  the  acceptor,  imports  a 
sufficient  consideration,  and  in  a  suit  by  the  former  against  the  latter  the 
defence  of  prior  equities,  as  between  the  acceptor  and  the  drawer,  is  not 
open  unless  it  be  shown  that  the  payee,  at  the  time  he  became  the  holder 
of  the  instrument,  had  knowledge  of  those  facts  and  circumstances. 

Attempt  is  made  in  argument  to  show  that  the  plaintiffs  accepted  the 
bills  of  exchange  upon  the  foith  and  security  of  the  bills  of  lading  attached 
to  the  same  at  the  time  the  bills  of  exchajige  were  discounted  by  the  de- 
fendants. Suppose  it  was  so,  which  is  not  satisf^ictorily  proved,  still  it  is 
not  perceived  that  the  concession,  if  made,  would  benelit  the  plaintiffs,  as 
the  bills  of  exchange  are  in  the  usual  form  and  contain  no  reference  what- 
ever to  the  bills  of  lading,  and  it  is  not  pretended  that  the  defendants  had 
any  knowledge  or  intimation  that  the  bills  of  lading  were  not  genuine,  nor 
is  it  pretended  that  they  made  any  representation  upon  the  suliject  to 
hiduce  the  plaintiffs  to  contract  any  such  liability.  They  received  the  bills 
of  exchange  in  the  usual  course  of  their  business  as  a  bank  of  discount  and 
paid  the  full  amount  of  the  net  proceeds  of  the  same  to  the  drawers,  and 
it  is  not  even  suggested  that  any  act  of  the  defendants,  except  the  indorse- 
ment of  the  bills  of  exchange  in  the  usual  course  of  their  business,  operated 
to  the  prejudice  of  tlie  plaintiffs  or  prevented  them  from  making  an  earlier 
discovery  of  the  true  character  of  the  transaction.  On  the  contrary,  it 
distinctly  appears  that  the  drawers  of  the  bills  of  exchange  were  the  regu- 
lar correspondents  of  the  plaintiffs,  and  that  they  became  the  acceptors 
of  the  bills  of  exchange  at  the  request  of  the  drawers  of  the  same,  and 
upon  their  representations  that  the  flour  mentioned  in  the  bills  of  lading 
had  been  shipped  to  their  firm  for  sale  under  the  arrangement  before 
described. 

Beyond  doubt  tht  bills  of  lading  gave  some  credit  to  the  bills  of  exchange 
beyond  what  was  created  V>y  the  pecuniary  standing  of  the  parties  to  the 
same,  but  it  is  clear  that  they  are  not  a  part  of  those  instruments,  nor  are 
they  referred  to  either  in  the  body  of  the  bills  or  in  the  acceptance,  and 
they  cannot  be  regarded  in  any  more  favorable  light  for  the  plaintiifs  than 
as  collateral  security  accompanying  the  bills  of  exchange. 

Sent  forward,  as  the  bills  of  lading  were,  with  the  bills  of  exchange,  it 
is  beyond  question  that  the  property  in  the  same  i)assed  to  the  acccfitors 
when  they  paid  the  several  amounts  therein  specified,  as  the  lien,  if  any, 
in  favor  of  tlie  defendants  was  then  displaced  and  the  iilaintiils  became 
entitled  to  the  instruments  as  the  muniments  of  title  to  tlie  fhrnr  sliijipcd 
to  them  for  sale,  and  as  security  for  the  money  which  they  had  advanced 
under  the  arrangement  between  them  and  the  drawers  of  the  bills  of  ex- 

1  Fitch  V.  Jones,  5  Kl.  &  Bl.  238  ;  Arlioiiin  v.  Anderson,  1  A<1.  &  K.  N.  8. 
498;  Sinitli  v.   liraine,  16  Q.  IJ.  2U;   Hall  v.  I'Vatluistoiic,  3  M.   &  N.   287. 


254  HOFFMAN   &    CO.   V.   BANK   OF   MILWAUKEE.  [CHAP.  II. 

change.  Proof,  therefore,  that  the  bills  of  lading  were  forgeries  could  not 
operate  to  discharge  the  liability  of  the  plaintifts,  as  acceptors,  to  pay  the 
amounts  to  the  payees  or  their  indorsees,  as  the  payees  were  innocent 
holders,  having  paid  value  for  the  same  in  the  usual  course  of  business.^ 

Different  rules  apply  between  the  immediate  parties  to  a  bill  of  exchange 
—  as  between  the  drawer  and  the  acceptor,  or  between  the  payee  and  the 
drawer  —  as  the  only  consideration  as  between  those  parties  is  that  which 
moves  from  the  plaintiff  to  the  defendant ;  and  the  rule  is,  if  that  consid- 
eration fails,  proof  of  that  fact  is  a  good  defence  to  the  action.  But  the 
rule  is  otherwise  between  the  remote  parties  to  the  bill,  as,  for  example, 
between  the  payee  and  the  acceptor,  or  between  the  indorsee  and  the 
acceptor,  as  two  distinct  considerations  come  in  question  in  every  such  case, 
where  the  payee  or  indorsee  became  the  holder  of  the  bill  before  it  was 
overdue  and  without  any  knowledge  of  the  facts  and  circumstances  which 
impeach  the  title  as  between  the  immediate  parties  to  the  instrument. 
Those  two  considerations  are  as  follows  :  First,  that  which  the  defendant 
received  for  his  liability,  and,  secondly,  that  which  the  plaintiff  gave  for  his 
title,  and  the  rule  is  well  settled  that  the  action  between  the  remote  parties 
to  the  bill  will  not  be  defeated  unless  there  be  an  absence  or  failure  of  both 
these  considerations.^ 

Unless  both  considerations  fail  in  a  suit  by  the  payee  against  the  acceptor 
it  is  clear  that  the  action  may  be  maintained,  and  many  decided  cases 
affirm  the  rule,  where  the  suit  is  in  the  name  of  a  remote  indorsee  against 
the  acceptor,  that  if  any  intermediate  holder  between  the  defendant  and 
the  plaintiff  gave  value  for  the  bill,  such  an  intervening  consideration  will 
sustain  the  title  of  the  plaintiflV' 

Where  it  was  arranged  between  a  drawer  and  his  correspondent  that  the 
latter  would  accept  his  bills  in  consideration  of  produce  to  be  shipped  or 
transported  to  the  acceptor  for  sale,  the  Supreme  Court  of  Pennsylvania 
held,^  that  the  acceptor  was  bound  to  the  payee  by  his  general  acceptance 
of  a  bill,  although  it  turned  out  that  the  bill  of  lading  forwarded  at  the 
same  time  with  the  bill  of  exchange  was  fraudulent,  it  not  being  shown  that 
the  payee  of  the  bill  was  privy  to  the  fraud.  Evidence  was  introduced  in 
that  case  showing  that  the  payee  knew  what  the  terms  of  the  arrangement 
between  the  drawer  and  the  payee  were,  but  the  court  held  that  mere 
knowledge  of  that  fiict  was  not  sufficient  to  constitute  a  defence,  as  the 
jiayee  was  not  a  party  to  the  arrangement,  and  was  not  in  any  respect  a 
surety  for  the  good  faith  and  fair  dealing  of  the  shipper. 

1  Lp;ith(M-  V.  Simpson,  L.  R.  11  Eq.  398. 

2  Kobinson  v.  Reynolds,  2  Q.  B.  202  ;  Same  v.  Same,  in  error,  2  Q.  B.  210  ;  Byles  on 
Bills  (5th  Am.  Ed.),  124  ;  Tliiedemann  v.  Goldschmidt,  1  De  G.  F.  &  J.  10. 

3  Hunter  v.  Wilson,  4  Exch.  489  ;  Boyd  v.  McCann,  10  Me.  118  ;  Howell  v.  Crane, 
12  La.  Ann.  126  ;  Watson  v.  Flana.^'aii,  14  Tex.  354. 

4  Craig  V.  Sibbett  ct  al.,  15  Pa.  240. 


SECT.  I.]  HOFFMAN    &    CO.   V.   BANK   OF   MILWAUKEE.  255 

Failure  of  consideration,  as  between  tlie  drawer  and  acceptor  of  a  bill 
of  exchange,  is  no  defence  to  an  action  brought  by  the  payee  against  the 
acceptor,  if  the  acceptance  was  unconditional  in  its  terms,  and  it  appears 
that  the  plaintiff  paid  value  for  the  bill,  even  though  the  acceptor  was 
defrauded  by  the  drawer,  unless  it  be  shown  that  the  payee  had  knowledge 
of  the  fraudulent  acts  of  the  drawer  before  he  paid  such  value  and  became 
the  holder  of  tlie  instrument.^ 

Testimony  to  show  that  the  payees  were  not  bona  Jide  holders  of  the  bills 
would  be  admissible  in  a  suit  by  them  against  the  acceptors,  and  would 
constitute,  if  believed,  a  good  defence,  but  the  evidence  in  this  case  does 
not  show  that  they  did  anything  that  is  not  entirely  sanctioned  by  commer- 
cial usage.  They  discounted  these  bills  and  they  had  a  right  to  present 
them  for  acceptance,  and  having  obtained  the  acceptance  they  have  an  un- 
doubted right  to  apply  the  proceeds  collected  from  the  acceptors  to  their 
own  indemnity. ""^ 

Forgery  of  the  bills  of  lading  would  be  a  good  defence  to  an  action  on 
the  bills  if  the  defendants  in  this  case  had  been  the  drawers,  but  tliey  were 
payees  and  holders  for  value  in  the  regular  course  of  business,  and  the  case 
last  referred  to,  which  was  decided  in  the  Exchequer  Chamber,  shows  that 
such  an  acceptance  binds  the  acceptor  conclusively  as  between  them  and 
every  boiia  Jide  holder  for  value. 

Very  many  cases  decide  that  the  drawee  of  a  bill  of  exchange  is  bound 
to  know  the  handwriting  of  his  correspondent,  the  drawer,  and  that  if  he 
accepts  or  pays  a  bill  in  the  hands  of  a  bona  Jide  holder  for  value,  he  is 
concluded  by  the  act,  although  the  bill  turns  out  to  be  a  forgery.  If  he 
lias  accepted  he  must  pay,  ar.d  if  he  has  paid  he  cannot  recover  the  money 
back,  as  the  money,  in  such  a  case,  is  paid  in  pursuance  of  a  legal  obligation 
as  luiderstood  in  the  commercial  law.^ 

Difficulty  sometimes  arises  in  determining  whether  the  plaintiff,  in  an 
action  on  a  bill  of  exchange,  is  the  immediate  promisee  of  the  defendant, 
or  whether  he  is  to  be  regarded  as  a  remote  party,  but  it  is  settled  law  that 
the  payee,  where  he  discounts  the  bill  at  the  request  of  the  drawer,  is 
regarded  as  a  stranger  to  the  acceptor  in  respect  to  the  consideration  for 
the  acceptance ;  consequently,  if  the  acceptance  is  absolute  in  its  terms 
and  the  bill  is  received  in  good  faith  and  for  value,  it  is  no  answer  to  an 
action  by  him  that  the  defendant  received  no  consideration  for  his  acceptance 
or  that  the  consideration  therefor  has  failed  ;  and  it  is  immaterial  in  that 
behalf  whether  the  bill  was  accepted  while  hi  the  hands  of  the  drawer  and 

1  TiiitM  States  r.  Bank  of  Metropolis,  15  Pet.  303. 

2  Thieileinami  v.   Goldschmiilt  et  al.,  1  De  G.   K.  &  J.  10  ;  Robinson  v.  ReynoUls, 

2  Q.  H.  211. 

8  Godiianl  v.  Merchants'  Hnnk,  4  Conist.  119  ;  Bank  of  ConinuMvo  v.  Union  Bank, 

3  ''V.m.'.t.  234  ;  Bank  of  the  United  States  v.  Bunk  of  Georgia,  10  Wlieat.  348  ;  Price  v. 
N-al.  3  BiiiT.  1356. 


256  NATIONAL    BANK    OF   KOETH   AMERICA   V.    BANGS.      [CHAP.  IT. 

at  his  request,  or  whether  it  had  passed  into  the  hands  of  the  payee  before 
acceptance  and  was  accepted  at  his  request.^ 

Certain  other  defences,  such  as  that  the  payments  were  vohmtarily  made, 
and  that  the  title  to  the  bills  at  the  time  the  payments  were  made  was  in 
the  National  Park  Bank,  were  also  set  up  by  the  defendants,  but  the  court 
does  not  find  it  necessary  to  examine  those  matters,  as  they  are  of  the 
opinion  that  the  payments,  if  made  to  the  payees  of  the  bills,  as  contended 
by  the  plaintiffs,  were  made  in  pursuance  of  a  legal  obligation  and  that 

the  money  cannot  be  recovered  back.^ 

Judgment  affirmed. 


NATIONAL    BANK    OF    NORTH    AMERICA    OF    BOSTON    v. 
EDWARD   D.    BANGS   and   Another. 

In  the  Supreme  Judicial  Court  of  Massachusetts,  March,  1871. 

[Reported  t7i  106  Massachusetts  Reports,  441.] 

Contract  against  the  members  of  the  firm  of  E.  D.  &  G.  W.  Bangs  & 
Company,  to  recover  back  money  paid  by  the  plaintiffs  on  a  forged  check  ; 
submitted  to  the  judgment  of  the  court  on  these  facts  agreed  :  — 

"The  defendants,  on  September  21,  1869,  took  of  some  person  (whom 
they  do  not  remember,  and  did  not  remember  when  they  were  first  notified 
of  the  alleged  forgery,  and  could  not  then  tell  whether  he  was  a  stranger  to 
them  or  a  person  known  to  them)  in  good  faith  and  for  full  value,  in  pay- 
ment for  gold  sold  by  them  in  the  usual  course  of  their  business,  a  check 
payable  to  their  order,  of  which  the  following  is  a  copy  :  — 

"$1,308.63.  National  Bank  of  North  America.  Boston,  Sept.  21, 
1869.  Pay  to  the  order  of  E.  D.  &  G.  W.  Bangs  &  Co.,  Thirteen  hundred 
eight  dollars  and  sixty-three  cents. 

"No.  932.  William  D.  Bickford. 

"On  said  September  21,  the  defendants  deposited  this  check,  with  others, 
and  with  their  other  moneys,  in  the  Maverick  National  Bank  of  Boston, 
where  they  kept  their  deposits ;  and  before  depositing  it,  for  the  pur])ose  of 
enabling  the  Maverick  National  Bank  to  collect  the  check  from  the  National 
Bank  of  North  America,  and  in  accordance  with  the  usage  of  depositors  of 
checks  payable  to  order,  they  indorsed  it  in  blank  by  writing  on  the  back 
of  it  '  E.  D.  &  G.  W.  Bangs  &  Co.'     The  Maverick  National  Bank  the  next 

1  Parsons  on  Bills,  179  ;  Munroe  v.  Bordier,  8  C.  B.  862. 

2  Young  et  al.  v.  Lehman  et  al.,  63  Ala.  519;  First  National  Bank  of  Detroit  v. 
Burhhani,  32  Mich.  323  accord.  See  also  Goetz  v.  Rank  of  Kansas  City,  119  U.  S. 
65L  — Ed. 


SECT.  I.]         NATIONAL   BANK   OF   NORTH   AMERICA  V.   BANGS.  257 

drtv  presented  the  check  at  the  clearing-house,  when  it  was  allowed  and 
paid  to  the  Maverick  National  Bank  by  the  National  Bank  of  North 
America  in  the  usual  manner  of  settling  the  daily  balances  of  banks  at  the 
clearing-house. 

"The  Maverick  National  Bank,  on  the  day  of  deposit,  credited  the  de- 
fendants with  the  amount  of  the  check  in  its  account  with  them ;  and  the 
National  Bank  of  North  America  on  September  22,  debited  William  D. 
Bickford,  in  whose  name  the  check  purported  to  have  been  drawn,  and  who 
was  a  customer  of  and  a  depositor  in  the  National  Bank  of  North  America, 
and  had  funds  on  deposit  there,  with  the  amount  of  the  check.  The  check 
was  retained  by  the  National  Bank  of  North  America  until  the  1st  or  2d 
of  October,  18G9,  when  it  was  sent  with  other  checks,  by  the  National  Bank 
of  North  America,  to  William  D.  Bickford,  with  the  monthly  statement  of 
his  account,  according  to  the  usage  of  banks.  Bickford,  after  examining 
the  checks,  pronounced  this  a  forgery,  and  on  the  4th  of  October  informed 
the  bank  of  it ;  and  on  the  same  day  the  defendants  were  notified  by  the 
National  Bank  of  North  America  that  the  check  was  forged,  which  was 
the  first  intimation  or  suspicion  they  had  that  the  check  was  forged.  For 
the  purposes  of  the  hearing  on  this  statement  of  facts,  it  is  admitted  that 
the  check  was  a  forgery." 

Both  banks  were  members  of  the  Boston  Clearing-House  Association  at 
the  time  of  these  transactions,  and  the  constitution  and  by-laws  of  that 
association  during  the  time  were  made  a  part  of  the  statement,  so  far  as 
they  should  be  found  material  and  competent.  The  substance  of  the  rules 
of  the  clearing-house,  so  far  as  they  are  material,  aj>pears  in  the  opinion. 

"  It  was  the  usage  for  each  bank  belonging  to  the  Clearing-House  Asso- 
ciation, each  morning,  at  ten  o'clock,  to  have  at  the  clearing-house,  for  the 
purpose  of  effecting  settlements  with  the  other  banks,  all  the  checks  and 
other  demands,  such  as  bills,  etc.,  it  had  received  against  all  the  other 
banks  during  the  preceding  day ;  making  them  up  into  separate  bundles 
for  each  bank,  with  a  ticket  containing  the  items  and  aggregate  of  the  con- 
tents of  each  bundle.  The  settlement  was  made  at  the  clearing-house  upon 
the  footings  of  these  tickets,  without  regard  to  the  fact  whether  the  con- 
tents of  the  bundle  were  correctly  ticketed,  or  formed  good  claims  against 
the  bank  charged  with  the  contents  of  the  bundle  as  per  ticket ;  and  in 
from  ten  to  fifteen  minutes  past  ten  o'clock  the  messenger  from  each  bank 
^vas  able  to  receive  and  take  to  his  bank  all  the  claims  of  the  other  banks 
against  it.  On  the  return  of  the  messenger  to  his  bank,  the  messenger 
delivers  to  the  paving  teller  the  various  bundles  of  demands  against  the 
bank  ;  and  it  was  the  usage  for  the  paying  toller,  or  some  other  officer  of 
the  bank  charged  with  that  duty,  to  immediately  proceed  to  open  and 
examine  the  contents  of  these  bundles,  ascertaining  whether  the  contents 
of  each  bundle  correspon.lod  with  the  ticket,  and  whether  each  check  was 
properly  signed,  drawn,  and  indorsed,  and  whether  the  drawers  ..f  the  check 

17 


258  NATIONAL    BANK    OF   NOETH    AMERICA   V.   BANGS.      [CHAP.  II. 

had  funds  deposited  sufficient  to  meet  the  amounts  drawn ;  and  all  this  is 
completed  before  one  o'clock  of  the  same  day ;  and  all  checks  not  then 
returned  to  the  banks  from  which  they  were  received  are  then  charged  to 
the  drawers,  in  the  same  manner  as  if  they  had  been  presented  and  paid  at 
the  counter  of  the  bank. 

"  It  is  agreed  that  the  Bank  of  North  America  acted  in  good  faith  in  the 
premises." 

H.  C.  Ilvtchins  and  H.  H.  Currier  for  the  plaintiffs. 

W.  A.  Field  for  the  defendants. 

Wells,  J.  This  suit  is  brought  to  recover  money  paid  upon  a  check 
purporting  to  be  drawn  by  one  Bickford  upon  the  plaintiff  bank,  to  the 
order  of  the  defendants,  indorsed  by  them,  deposited  with  their  banker, 
and  collected  through  the  cleai-ing-house.  The  signature  of  the  di-awer 
proved  to  be  a  forgery.  As  the  discovery  of  the  forgery  was  not  made  in 
time  to  enable  the  plaintiff  to  return  the  check,  as  of  absolute  right,  under 
the  rules  of  the  clearing-house,  we  think  the  case  must  stand  as  if  the  pay- 
ment had  been  made  directly  at  the  plaintiff's  counter,  in  the  ordinary 
mode. 

The  right  of  return,  secured  by  the  rules  of  the  clearing-house,  is  a  spe- 
cial provision,  in  compensation  for  payment  without  inspection.  Instead 
thereof,  the  ru.les  give  opportunity  for  subsequent  inspection.  When  that 
has  been  had,  the  special  rules  cease  to  govern ;  and  the  rights  of  the  pay- 
ing bank  rest  upon  the  general  principles  of  law.  Boylston  National  Bank 
V.  Richardson.^  But,  in  applying  those  general  principles,  it  was  held  in 
Merchants'  National  Bank  v.  National  Eagle  Bank,^  that  the  drawee  of  a 
check,  who  paid  it  without  inspection,  under  the  provisions  of  the  clearing- 
house rules,  might  recover  back  the  money,  if  there  had  been  no  actual 
laches  on  the  part  of  the  drawee,  and  no  change  of  position  on  the  part  of 
the  holder;  notwithstanding  "the  failure  of  the  bank  to  return  a  check  by 
one  o'clock,"  as  allowed  by  the  rules.  The  failure  in  that  case  was  by 
accident,  and  involved  no  neglect. 

In  this  case,  the  money  was  paid  to  the  use  of  the  defendants.  In  mak- 
ing up  and  returning  the  monthly  account  of  its  depositor,  the  forgery  was 
discovered,  and  made  known  to  the  plaintiff,  and  notice  thereof  was  imme- 
diately given  to  the  defendants.  In  this  respect  the  case  shows  no  laches 
on  the  part  of  the  plaintiff,  and  no  change  of  situation  on  the  part  of  the 
defendants,  which  can  defeat  a  recovery,  if  any  right  of  recovery  ever 
existed,  or  could  arise  from  the  payment  in  the  manner  stated.  Merriam 
V.  Wolcott ;  ^  Canal  Bank  v.  Bank  of  Albany.* 

If  the  suit  were  between  the  bank,  or  drawee,  and  a  party  who  took  the 
check  in  the  usual  course  of  business,  finding  it  in  circulation,  or  even  by 
first  indorsement  from  the  payee,  the  loss  would  fall  upon  the  bank  ;  be- 
cause, having  greater  means  and  opportunity  to  become  familiar  with  the 

1  10)1  Mass.  287.  »  101  Mass.  281.  »  3  Allen,  258.  *  1  Hill,  287. 


SECT.  I.]         NATIONAL   BANK    OF   NORTH   AMERICA  V.   BANGS.  259 

handwriting  of  their  correspondents  or  depositors,  the  law  presumes  that 
drawees  will  know  their  signatures  and  be  able  to  detect  forgeries.  Fi-om 
this  presumption  arises  what  is  often  called  an  obligation  or  responsibility 
on  the  part  of  the  drawee  of  a  bill  or  check,  which  prevents  him  from  recov- 
ering back  money  paid  upon  it  on  the  ground  of  a  mistake  of  fact.  Price 
V.  Xeal ;  ^  Levy  v.  Bank  of  the  United  States  ; '  Bank  of  St.  Albans  v.  Far- 
mers' &  Mechanics'  Bank.'  Eat  this  responsibility,  based  upon  presump- 
tiou  alone,  is  decisive  only  when  the  party  receiving  the  money  has  in  no 
way  contributed  to  the  success  of  the  fraud,  or  to  the  mistake  of  fact  under 
which  the  payment  was  made.  "  If  the  loss  can  be  traced  to  the  fault  or 
negligence  of  either  party,  it  shall  be  fixed  upon  him."  Gloucester  Bank  v. 
Salem  Bank.*  In  the  absence  of  actual  fault  or  negligence  on  the  part  of 
the  drawee,  his  constructive  fault,  in  not  knowing  the  signature  of  the 
drawer  and  detecting  the  forgery,  will  not  preclude  his  recovery  from  one 
who  has  received  the  money  with  knowledge  of  the  forgery,  or  who  took 
the  check,  under  circumstances  of  suspicion,  without  proper  precautions, 
or  whose  conduct  has  been  such  as  to  mislead  the  drawee,  or  to  induce  him 
to  pay  the  check  without  the  usual  scrutiny  or  other  precautions  against 
mistake  or  fraud. ^  These  exceptions  are  implied  by  the  very  terms  in  which 
the  general  rule  is  ordinarily  stated.  The  case  of  Ellis  v.  Ohio  Insurance 
&  Trust  Co.®  is  an  express  decision  to  that  effect,  and  contains  an  able  and 
thorough  discussion  of  the  subject.  We  are  aware  of  no  case  in  which  the 
principle  that  the  drawee  is  bound  to  know  the  signature  of  the  drawer  of 
a  bill  or  check,  which  he  undertakes  to  pay,  has  been  held  to  be  decisive  in 
favor  of  a  payee  of  a  forged  bill  or  check  to  which  he  has  himself  given 
credit  by  his  indorsement. 

In  the  present  case,  the  check  had  not  gone  into  circulation,  and  could 
not  get  into  circulation  until  it  was  indorsed  by  the  defendants.  Their 
indorsement  wonld  certify  to  the  public,  that  is,  to  every  one  who  should 
take  it,  the  genuineness  of  the  drawer's  signature.  Without  it,  the  check 
could  not  properly  he  paid  by  the  plaintiff.  Their  indorsement  tended  to 
divert  the  plaintiff  from  inquiry  and  scrutiny,  as  it  gave  to  the  check  the 
appearance  of  a  genuine  transaction,  to  the  inception  of  which  the  defend- 
ants were  parties.  Their  names  upon  the  check  were  apparently  inconsist- 
ent with  any  suspicion  of  a  forgery  of  the  drawer's  name. 

But  to  the  defendants  the  presentation,  by  a  stranger  or  third  party,  ofi 
a  check  purporting  to  be  drawn  to  their  own  order,  which  such  third  party 
proposed  to  negotiate  to  them  for  value,  was  a  transaction  which  shouldj 
have  aroused  their  suspicions.  It  ought  to  have  put  them  upon  inquiry 
for  explanations;  and  if  inquiry  had  been  properly  made  it  would  have  dis- 
closed the  fraud  and  prevented  its  success.     The  case  finds  that  they  acted 

»  3  Burr.  13.'')4.  2  1  Rjnn.  27.  '  10  Verm.  141.  *  17  Mn9.s.  33,.  42. 

*  Rouvant  v.  San  Antonio  Natioiiiil  li;ink,  6:5  T.-.x.  610,  accord.  —  Kd. 

•  4  Ohio  St.  628. 


260  CARPENTER   V.    NORTHBOROUGII   NATIONAL    BANK.       [CHAP.  II. 

in  good  faith.  But  that  does  not  exclude  such  omission  of  due  precautions 
as  to  deprive  them  of  the  right  to  throw  the  loss  upon  another  party  who 
acted  in   like  good  faith,  and  also  without  fault  or  want  of  due  care. 

It  is  possible  that  the  defendants  may  have  received  the  check  under  cir- 
cumstances which  would  exonerate  them  from  the  imputation  of  any  actual 
fault  or  neglect.  But  the  agreed  statement  fails  to  disclose  any  such  expla- 
nation. A  majority  of  the  court  are  therefore  of  opinion  that  the  judgment 
must  be  for  the  plaintiff,  for  the  amount  of  the  check  and  interest  from  the 
time  it  was  paid. 

Ordered  accordingly. 


CYRUS  CARPENTER  and  Others  v.  NORTHBOROUGH  NATIONAL 

BANK. 

In  the  Supreme  Judicial  Court  of  Massachusetts,  July  3,  1877. 

[Reported  in  123  Massachusetts  Reports,  C6.] 

Contract  for  money  had  and  received.  Trial  in  the  Superior  Court, 
before  Gardner,  J.,  who,  at  the  request  of  the  plaintiffs,  reported  the  case 
for  the  consideration  of  this  court,  in  substance  as  follows  :  — 

The  plaintiffs  had  been  engaged  for  manj'  years  in  Boston,  under  the  firm 
name  of  Cyrus  Carpenter  &  Co.,  as  manufacturers  of  ranges  and  furnaces. 
They  had  known  Abraham  Jackson  and  William  Carpenter  for  several 
years,  and  had  had  business  transactions  with  them.  William  Carpenter 
was  a  builder  and  owned  some  real  estate  and  other  property.  Jackson 
had  acted  as  his  legal  adviser,  and  held  a  power  of  attorney  authorizing  him 
to  collect  debts  due  William  Carpenter  and  to  sell  and  convey  his  land. 
It  was  alleged  by  the  defendant,  but  denied  by  the  plaintiffs,  that  William 
Carpenter  had  also  given  Jackson  a  power  of  attorney  to  make  and  execute 
promissory  notes  and  to  use  his  (Carpenter's)  name  in  any  business  in 
which  he  (Carpenter)  was  engaged  ;  and  there  was  conflicting  evidence  on 
this  point,  William  Carpenter  had  upon  some  occasions  left  with  Jackson 
promissory  notes,  signed  by  him  in  blank,  which  Jackson  had  negotiated 
with  the  plaintiffs  and  others.  Prior  to  the  transaction  in  qtiestion,  the 
plaintiffs  had  exchanged  notes  with  Jackson  and  William  Carpenter,  some- 
times for  the  accommodation  of  the  former  and  sometimes  for  their  own 
accommodation.  About  February  15,  1875,  Jackson  and  William  Carpen- 
ter obtained  from  the  plaintiffs,  for  Jackson's  accommodation,  three  prom- 
issory notes  made  by  them,  amounting  in  all  to  about  $6400,  one  of  which 
was  for  the  sum  of  $2025.  The  plaintiffs  received  from  Jackson  and  Wil- 
liam Carpenter  notes  signed  and  indorsed  by  them  in  exchange  for  these 
notes.     The  notes  were  not  identical  in  form  but   aggregated  the  same 


SECT.  I.]   CARPENTER  V.   NORTHBOROUGII  NATIONAL  BANK.       261 

amount.  A  few  days  afterwards  Jackson  called  alone  at  the  plaintiffs* 
place  of  business  and  stated  to  Cyrus  Carpenter  that  he  desired  to  get 
another  note  from  the  plaintiffs  for  |!2G25,  and  that  he  could  place  it  at 
less  rate  of  discount  than  the  former  note.  Cyrus  Carpenter  thereupon 
gave  him  a  note  for  S2G25,  signed  by  the  plaintiffs,  dated  February  15, 
IS 75,  payable  to  the  order  of  William  Carpenter  in  four  months  from  date. 
and  Jackson  gave  him  in  exchange  a  note  for  the  same  amount,  date  and 
time,  signed  by  himself  to  the  order  of  William  Carpenter  and  indorsed  by 
William  Carpenter.  In  April,  1875,  Jackson  left  IJoston,  and  was  subse- 
quently adjudged  a  bankrupt.  William  Carpenter  also  failed  and  was  ad- 
judged a  bankrupt.  There  are  only  nominal  assets  in  his  estate;  and  no 
dividend  has  been  declared  out  of  it.  The  plaintiffs  proved  against  William 
Carpenter  all  of  the  claims  held  by  them,  including  the  note  for  S2G25, 
<*iven  in  exchange  for  the  second  note  funiishcd  to  Jackson,  and  Cyrus 
Carpenter  was  appointed  one  of  the  assignees  of  his  estate. 

Shortly  before  the  plaintiffs'  second  note  for  $2625  matured,  the  plain- 
tiffs were  notified  that  the  same  was  held  by  the  defendant,  and  thereupon 
■wrote  to  the  defendant  that  it  would  not  be  convenient  for  them  to  pay  the 
note  at  maturity,  but  that  they  would  pay  twenty-five  per  cent  in  cash  and 
give  a  note  for  the  remainder.  A  few  days  after  its  maturity,  namely,  on 
June  26,  1875,  one  Bush,  the  president  of  the  defendant,  called  at  the 
plaintiffs'  place  of  business  and  brought  the  note  with  him.  A  settlement 
was  made  by  the  payment  of  8704.95  in  money,  and  the  giving  of  a  new 
note  by  the  plaintiffs  for  $1968.75,  payable  in  four  months  from  June  18, 
1875.  The  plaintiff  testified  that  he  was  flxmiliar  with  the  signature  of 
William  Carpenter,  but  that,  in  the  conversation  with  the  president  of  the 
defendant  bank,  nothing  was  said  about  the  indorsement,  and  that  he  did 
not  in  fact  examine  it.  Bush  testified  that  Cyrus  Carpenter  turned  the 
note  over  and  looked  at  the  indorsements.  Bush  was  not  familiar  with 
William  Carpenter's  signature.  Shortly  after  Bush  had  left  the  plaintiifs' 
counting-room,  Cyrus  Carpenter  handed  the  note  to  his  son,  one  of  the 
plaintiffs  and  bookkeeper  of  the  firm.  The  note  purported  to  be  indorsed 
by  William  Carpenter  and  by  Abraham  Jackson.  The  son  immediately 
expressed  the  opinion  that  the  pretended  signature  of  William  Carpenter 
was  a  forgery.  The  note  was  soon  afterwards  shown  to  William  Carpenter, 
who  pronounced  his  signature  a  forgery.  The  plaintiffs  thereupon  notified 
the  defendant  that  the  supposed  indorsement  of  William  Carpenter  was 
forged,  that  they  would  require  the  defendant  to  return  the  nioncy  paid, 
and  they  should  not  pay  the  note  for  $1968.75. 

The  plaiutills  subsequently  filed  a  petition  in  bankruptcy,  and  eflected  a 
composition  with  their  creditors  for  ten  cents  on  the  dollar,  in  accordance 
with  the  provisions  of  the  bankrupt  law. 

There  was  evidence  tending  to  prove  that  the  indorsement  of  William 
Carpenter  to  the  note  aforesaid  was  forged,  that  he  did  not  know  of  the 


262  CARPENTER   V.   NORTHBOROUGII    NATIONAL   BANK.      [CHAP.  II. 

making  of  the  note ;  and  it  appeared  that  the  note  was  placed  or  passed 
about  the  time  of  its  date  by  Jackson  through  a  broker  to  the  defendant, 
who  discounted  and  took  and  paid  the  amount  of  the  same  in  good  faith, 
and  there  was  evidence  tending  to  prove  that  the  proceeds  of  the  note 
were  used  by  Jackson  for  his  own  purposes. 

Upon  this  evidence  the  judge  ruled  that  the  action  could  not  be  main- 
tained, and  directed  a  verdict  for  the  defendant.  If  there  was  any  evidence 
upon  which  the  action  could  be  maintained,  the  verdict  was  to  be  set  aside 
and  the  case  stand  for  trial. 

H.  M.  Morse  Jr.  (C  P.  Greenough  with  him)  for  the  plaintiffs. 

A.  A.  Ranney  for  the  defendant,  cited  Farmer  v.  Arundel;'  Moore  v. 
Edtlowes  ;  ^  Norton  v.  Marden.^ 

Lord,  J.  It  is  to  be  assumed,  in  testing  the  accuracy  of  the  ruling  of 
the  learned  judge  who  presided  at  the  trial,  that  every  fact  upon  which 
there  was  evidence  for  the  jury  was  found  most  favorably  for  the  plaintiffs. 

It  is  then  to  be  taken  that  the  signature  of  William  Carpenter  was 
forged ;  that  Jackson  misappropriated  the  funds  which  he  had  procured 
upon  the  forged  indorsement;  that  William  Carpenter  never  had  knowledge 
that  such  note  had  been  taken  in  his  name  by  Jackson,  and  that  the  note 
was  originally  obtained  from  the  plaintiffs  by  fraud.  It  must  also  be  taken 
to  be  settled  that  Jackson  had  no  authority  to  indorse  the  name  of  William 
Carpenter,  nor  to  assign  the  note  for  his  own  benefit ;  and  that  the  acts 
done  in  the  premises  by  Jackson  were  done  in  fraud  of  the  rights  of  Wil- 
liam Carpenter  and  of  the  plaintiffs.  The  question  then  is  :  Could  the 
bank  acquire  any  title,  legal  or  equitable,  to  the  note  thus  originally  ob- 
tained by  fraud,  and  passed  to  it  not  only  in  fraud  of  the  rights  of  the 
maker,  but  by  forgery  as  one  of  the  means  of  accomplishing  the  fraud  % 
Certainly  it  could  not. 

The  question  sometimes  discussed,  whether  an  acceptor  is  bound  to 
know  the  genuineness  of  the  signature  of  the  drawer,  does  not  arise.  Nor 
is  it  necessary  to  consider  to  what  extent  the  rule  that  every  party  to  mer- 
cantile paper  warrants  the  genuineness  of  every  signature  preceding  his,  is 
to  be  applied.  The  plaintiffs  were  the  makers  of  the  note.  It  was  payable 
only  to  the  order  of  William  Carpenter.  Such  order  was  never  given.  The 
plaintiffs  therefore  had  never  promised  to  pay  the  note  to  the  bank.  The 
bank  could  not  have  collected  the  note  of  the  plaintiffs.  When  the  plain- 
tiffs paid  the  note  to  the  bank,  they  paid  it  under  the  mistaken  belief  that 
the  bank  was  the  legal  owner  of  the  note,  and  had  the  right  to  collect  it. 
It  was,  however,  immediately  discovered  that  the  bank  had  no  such  right, 
and  notice  was  at  once  given  to  it  that  the  money  thus  paid  by  mistake 
would  be  reclaimed.  It  is  common  learning  that  ordinarily  money  paid  by 
mistake  to  a  person  not  authorized  to  receive  it  may  be  recovered  back  by 
the  person  paying.  The  cases  in  which  it  has  been  held  that  money  thus 
1  2  Bl.  R.  824.  2  2  A.  &  E.  133  n.  ^  15  Me.  45. 


SECT.  I.]   CARPENTER  V.   NORTHBOROUGH  NATIONAL  BANK.       2G3 

paid  cannot  be  recovered  back  have  been  exceptions  to  the  rule,  by  reason 
of  peculiar  circumstances  attending  the  particular  payments. 

The  case  most  resembling  this,  but  less  favorable  to  the  plaintiflfs,  is  that 
of  Canal  Bank  v.  Bank  of  Albany.^  That  was  the  case  of  the  acceptor  of  a 
draft  in  favor  of  one  Bentley  ;  the  name  of  Bentley  was  forged ;  subsequently 
the  draft  was  indorsed  by  several  innocent  parties  ;  and  it  came  into  the 
hands  of  the  defendant  bank  for  collection  on  account  of  another  bank. 
Upon  notice,  the  acceptor  paid  the  draft  to  the  defendant  bank,  which  did 
not  disclose  the  fact  of  its  agency,  which  bank  paid  the  amount  over  to  its 
principal.  Several  weeks  afterwards  it  was  discovered  that  the  name  of 
Bentley  was  forged,  too  late  to  give  notice  to  the  indorsers,  and  after  pay- 
ment to  the  principal.  It  was  held  that  the  money  could  be  recovered 
back  of  the  defendant,  notwithstanding  the  defendant  had  paid  it  over 
without  notice,  and  notwithstanding  that  the  indorsers  could  not  be  noti- 
fied of  the  refusal  or  the  failure  of  the  acceptor  to  pay.  It  was  said  that, 
inasmuch  as  each  subsequent  indorser  had  paid  for  the  draft  under  a  mis- 
take of  fact,  supposing  it  to  be  a  genuine  instead  of  a  forged  indorsement, 
he  could  recover  the  amount  which  he  paid  of  the  person  to  whom  he  paid 
it.  It  is  not  necessary  for  us  to  consider  whether  or  not  the  rule  thus  laid 
down  is  sound,  for  the  reasons,  first,  that  no  such  question  arises  in  the 
present  aspect  of  the  case,  nor  can  it  arise  in  this  case,  inasmuch  as  Abra- 
ham Jackson,  the  assumed  forger  of  the  indorsement,  was  the  only  indorser 
of  the  note  against  whom  any  claim  could  arise  as  indorser;  and  neither 
law  nor  equity  could  require  that  notice  should  be  given  to  Jackson,  to  fix 
his  liability  upon  a  note  which  he  had  passed  by  his  own  forgery  of  an 
indorsement. 

Inasmuch,  therefore,  as  in  this  case  there  are  none  of  the  elements  which 
have  been  held  to  bring  a  case  within  the  exceptions  to  the  general  rule,  an 
examination  of  the  exceptions  to  the  rule  is  unnecessary.  This  is  simply 
the  payment  of  a  note  to  a  party  who  has  no  legal  and  no  equitable  inter- 
est in  the  promise  of  the  maker,  whatever  its  rights  may  be  as  against 
Jackson,  whose  name  is  upon  the  same  paper.  The  money  having  been 
paid  by  mistake  to  a  person  who  had  no  right  to  demand  it,  the  case  is 
within  the  general  rule,  and  tlie  party  paying  ma}' recover  back  the  amount 
thus  paid.  This  principle  has  been  recognized  in  various  decisions  in  tliis 
Commonwealth.  See  Merriam  v.  Wolcott;'  Merchants'  National  Bank  v. 
National  Eagle  Bank  ;'  Boylston  National  Bank  v.  Richardson;*  National 

Bank  of  North  America  v.  Bangs.* 

Verdict  set  aside. 

I  1  Hill,  287.  2  3  Allen,  2.';8.  •  101  Mass.  281. 

*  101  Mass.  287.  *  106  Mass.  441. 


264  WELCH  V.    GOODWIN.  [CHAP.  IL 

THOMAS  J.   WELCH   v.   WILLIAM   H.   GOODWIN. 
In  the  Supreme  Judicial  Court  of  Massachusetts,  July  3,  1877. 

[Reported  in  123  Massachusetts  Reports,  71.] 

Contract  for  money  had  and  received.  The  declaration  also  alleged 
that  the  defendant  was  the  holder  of  a  certain  promissory  note  purporting 
to  be  signed  by  the  plaintiff,  and  payable  to  the  order  of  and  indorsed  by 
Abraham  Jackson,  for  the  sum  of  $2000 ;  that  on  July  8,  1875,  the  plain- 
titf,  supposing  the  note  to  be  genuine,  and  the  signature  of  the  maker  upon 
it  to  be  his  own  signature,  at  the  request  of  the  defendant  and  before  the 
note  was  due,  paid  the  defendant  the  full  amount  of  the  note,  with  interest 
thereon,  namely,  the  sum  of  $2053 ;  that  the  note  was  not  genuine  ;  that 
he  never  signed  or  executed  it ;  that  his  name  signed  thereto  was  a  for- 
gery, and  not  made  by  him  or  with  his  knowledge  or  consent ;  that,  imme- 
diately upon  his  discovery  of  this  fact,  he  notified  the  defendant  and 
demanded  repayment  of  the  sum  so  paid.  Annexed  to  the  declaration  was 
a  copy  of  the  note,  as  follows  :  — 
$2000  00.  CuARLESTOWN,  March  1,  1873. 

For  value  received,  I,  Thomas  J.  Welch,  promise  to  pay  to  Abraham 
Jackson  or  order  the  sura  of  two  thousand  dollars  in  three  years  from  this 
date,  with  interest  to  be  paid  semi-annually  at  the  rate  of  eight  per  centum 
per  annum.  Thomas  J.  Welch. 

In  presence  of 

AVm.  T.  Canavan. 
Indorsed,  Abraham  Jackson. 

Trial  in  the  Superior  Court,  before  Gardner,  J.,  who  reported  the  case 
for  the  determination  of  this  court  in  substance  as  follows  :  — 

It  appeared  that  in  March,  1873,  the  plaintiff  borrowed  of  Abraham 
Jackson  the  sum  of  $2000,  and  gave  therefor  to  Jackson  his  note,  a  copy 
of  which  is  annexed  to  the  declaration,  and,  as  security  therefor,  a  mortgage 
upon  a  certain  parcel  of  real  estate  owned  by  him,  which  mortgage  was 
recorded  on  April  1,  1873;  that  prior  to  February,  1875,  Jackson  was 
largely  indebted  to  the  Eliot  National  Bank,  of  Boston,  of  which  the  de- 
fendant then  was  and  ever  since  has  been  the  president ;  that,  among  other 
indebtedness,  the  bank  held  a  note  for  $4500  of  Jackson's  and  of  the 
American  Steam  Safe  Company,  and  others,  upon  which  note  the  loan  of 
$4500  had  been  made  by  the  bank  ;  that  this  note  became  due  in  Febru- 
ary, 1875,  was  unpaid,  and  was  protested  for  non-payment;  that  shortly 
after,  the  bank  received  from  Jackson,  in  payment  of  the  past-due  time 


SECT.  I.]  "WELCH   V.   GOODWIN.  265 

note,  a  new  note  (the  old  note  being  retained  by  the  bank),  with  Jackson'3 
name  alone  on  it,  for  the  sum  of  $-4500  on  demand  made  by  Jackson,  pay- 
able to  the  bank,  and,  together  therewith,  certain  collateral  security,  —  the 
demand  note,  with  the  collateral,  being  received  as  a  substitute  for  the  old 
security  ;  that  the  collateral  consisted  of  three  mortgage  notes,  together 
with  the  assignments  of  the  mortgages,  one  of  which  notes  and  assignments 
was  a  note,  a  copy  of  which  is  annexed  to  the  declaration,  and  an  assign- 
ment of  the  mortgage  of  the  plaintiff  to  Jackson  ;  that  the  assignment  of 
the  mortgage  was  not  made  upon  the  original  mortgage  deed,  but  was  a 
separate  instrument,  and  was  from  Jackson  to  the  defendant  by  name  "  as 
trustee,"  but  the  nature  of  the  trust  was  not  set  forth  in  the  instrument ; 
that  this  assignment  was  executed  on  February  23,  1875,  and  recorded  at 
the  Registry  of  Deeds  in  Middlesex,  Southern  district,  on  February  23, 
1875,  and  in  the  Suffolk  Registry  of  Deeds,  on  March  10,  1875;  and  that, 
at  the  time  that  these  notes  and  assignments  were  received  by  the  bank, 
it  was  agreed  between  the  bank  and  Jackson,  that,  in  case  the  bank  should 
receive  upon  the  collateral  more  than  sufficient  to  satisfy  the  $4500  demand 
note,  the  balance  should  be  retained  atid  credited  towards  satisfying  what- 
ever other  indebtedness  there  might  remain  from  Jackson  to  the  bank. 

It  also  appeared  that  the  bank  realized  upon  the  whole  of  the  collateral 
security,  and  obtained  therefrom,  including  the  $2053  hereafter  mentioned, 
paid  by  the  plaintiff,  more  than  enough  to  pay  the  $4500  demand  note, 
with  interest,  and  that  the  balance  was  duly  credited  towards  satisfying 
the  remaining  indebtedness  of  Jackson  ;  that  Jackson  was  still  a  large 
debtor  to  the  bank;  and  that,  in  case  the  bank  should  repay  the  $2053 
paid  by  the  plaintiff,  the  amount  realized  from  the  whole  of  the  collateral 
would  not  be  enough  to  satisfy  and  pay  the  $4500  demand  note.  This 
evidence  was  objected  to  as  immaterial ;  but  by  agreement  of  counsel  it 
was  admitted  de  bene,  and  the  judge  reserved  the  matters  of  law  arising 
thereon  for  the  determination  of  this  court.  It  was  not  admitted  as  bear- 
ing upon  any  of  the  questions  submitted  to  the  jury. 

It  also  appeared,  and  was  uncontested,  that  a  petition  in  bankruptcy  was 
filed  against  Jackson  on  May  28,  1875,  and  that  he  was  duly  adjudicated  a 
bankrupt  tliercon. 

The  pliiintiff  proved  that  prior  to  February,  1875,  and  on  March  18, 
1873,  Jackson  made  an  assignment  of  the  plaintiff's  mortgage  to  the 
Franklin  Ins<irancc  Company,  and  therewith  a  note,  a  copy  of  which  is 
annexed  to  tlie  declaration  ;  that  this  assignment  was  not  upon  the  original 
mortgage  deed,  but  was  a  separate  instrument,  and  that  said  assiginnent 
was  not  recorded  until  April  2.3,  1875;  that,  in  the  spring  of  1875,  hearing 
that  Jackson  had  committed  forgeries,  the  jjlaintifT  desired  to  know  what 
had  become  of  his  mortgage  note;  that  he  thereupon  went  to  the  registry 
of  deeds  at  Cam\)ridge,  and  got  the  register  to  look  at  the  records,  and  was 
told  by  him  that  the  mortgage  had  been  assigned  to  William  H.  Goodwin; 


266  WELCH   V.    GOODWIN.  [CHAP.  IL 

and  he  testified  that  nothing  was  said  to  him  by  the  register  about  the  word 
"  trustee ; "  that  he  thereupon  called  upon  the  defendant  at  the  bank,  and 
had  several  interviews  at  the  bank  with  him,  which  resulted  on  July  8, 
1875,  which  was  more  than  seven  months  before  his  note  became  due,  in 
his  paying  to  Goodwin  the  sum  of  $2053,  being  the  amount  of  his  mortgage 
note,  and  the  interest  due  thereon  and  unpaid  ;  that  the  paper  purporting 
to  be  his  mortgage  note,  being  the  one  received  from  Jackson  by  the  bank, 
was  thereupon  surrendered  up  to  him,  and  that  thereupon  a  friend  who 
■was  with  him,  and  in  his  presence  and  in  the  presence  of  the  president  and 
cashier  of  the  bank,  scratched  with  pen  and  ink  the  name  "  Thomas  J. 
Welch"  signed  to  the  note;  that  he  directly  went  with  the  defendant  to 
the  registry  of  deeds,  where  the  defendant,  by  a  deed  as  trustee,  released 
to  him  the  mortgage  made  to  Jackson,  and  that  the  release  was  thereupon 
immediately  recorded  at  the  said  registry ;  that  he  thereafter,  and  on  the 
same  day,  iu  conversation  with  friends  and  at  their  suggestion,  tore  the 
name  of  "Thomas  J.  Welch"  off  from  the  note,  and  destroyed  that  portion 
of  the  paper  upon  which  it  was  written  ;  that  about  July  26,  1875,  he  was 
led  to  suspect  that  the  Franklin  Insurance  Company  held  a  note  purporting 
to  be  his  mortgage  note,  and  an  assignment  of  the  mortgage ;  that  he  called 
at  the  office  of  the  company,  and  was  there  shown  a  note  passed  by  Jackson 
to  that  company,  which  he  then  and  there  recognized  to  be  the  genuine 
mortgage  note,  and  was  also  shown  an  assignment  of  the  mortgage ;  that 
he  never  made  but  one  note  in  his  life;  that  he  immediately  consulted 
counsel,  who,  on  July  28,  1875,  gave  to  the  defendant  the  notice,  a  copy 
of  which  is  printed  in  the  margin ;  ^  that,  at  the  time  he  paid  the  $2053, 
he  supposed  and  understood  the  note  he  then  took  up  to  be  his  genuine 
note,  and  always  so  supposed  until  he  saw  the  note  held  by  the  Franklin 
Insurance  Company ;  that  the  defendant  never  notified  him  that  he  was 
acting  in  the  transaction  other  than  personally,  and  that  he  did  not  know 
that  it  was  a  bank  transaction  ;  and  that,  after  his  first  call  upon  the  de- 
fendant, he  received  two  letters,  which  he  had  since  lost,  requesting  him 
to  call  again ;  that  he  could  not  swear  certainly,  but  was  very  positive  that 
these  letters  were  signed  in  the  defendant's  name,  and  that  there  was  noth- 
ing contained  therein  indicative  of  the  matter  being  an  affair  of  the  bank, 
A  witness  called  by  the  plaintiff,  who  came  with  him  to  the  bank  when  the 
money  was"  paid,  testified  that  it  was  paid  into  the  defendant's  hands. 

1  Boston,  July  23,  1875. 
Wm.  H.  Goodwin,  Esq. 

Dkar  Siu,  —  We  aie  instructed  by  Mr.  Thomas  J.  Welch  to  inform  you  that  he 
finds  his  signature  on  the  note  for  $2000,  dated  March  12,  1873,  and  paid  to  3'ou  July  8, 
to  have  been  forged,  and  that  the  genuine  mortgage  note  is  held  by  the  Franklin  Insur- 
ance Company.     Accordingly  he  requests  you  to  repay  the  amount  of  his  payment,  viz., 

$2053. 

Respectfully  yours, 

MoKSE,  Stone  &  Greenough. 


SECT   I.]  WELCH   V.    GOODWIN.  267 

The  defendant  introduced  evidence  that  the  $2053  was  paid  by  the 
plaintiff  into  the  hands  of  the  cashier  of  the  bank,  and  not  into  his  hands ; 
that  the  defendant  never  wrote  to  the  plaintiff,  but  that  the  two  letters 
received  by  the  plaintiff  were  written  upon  paper  upon  the  top  of  which  was 
printed  "  Eliot  National  Bank.  W.  H.  (Joodwin,  president ;  R.  B.  Conant, 
aishier;"  and  that  both  letters  were  written  by  the  cashier,  signed  by  him 
in  his  name,  with  the  word  "cashier"  added,  and  that  they  referred  to  the 
matter  as  an  affair  of  the  bank,  and  stated  that  the  bank  held  the  assign- 
ment. The  defendant  proved  that  the  money  paid  by  the  plaintiff  was 
immediately  credited  to  Jackson's  account  on  the  books  of  the  bank,  and 
was  immediately  placed  with  the  other  funds  of  the  bank  ;  that  the  note 
paid  by  tiie  plaintiff  was  always  kept  by  the  bank  together  with  its  other 
securities,  and  was  in  charge  of  the  cashier ;  that  when  the  plaintiff  paid 
the  money,  the  defendant  had  no  knowledge  or  suspicion  of  this  note  being 
a  forgery,  and  no  knowledge  or  suspicion  of  the  existence  of  another  note 
or  of  another  assignment  of  the  mortgage,  and  never  had  any  knowledge 
or  suspicion  of  either  of  these  things.  The  defendant  also  testified  that 
he  did  not  recollect  distinctly,  but  thought  that  at  one  of  the  interviews 
with  the  plaintiff,  before  the  money  was  paid  him,  lie  exhibited  to  him  the 
assignment  from  Jackson  to  himself  as  "  trustee,"  which,  however,  the 
plaintiff  denied,  and  said  that  he  did  not  suppose  that  he  had  personally 
anything  to  do  with  the  matter,  Vmt  considered  it  a  bank  transaction,  and 
that  in  all  that  he  did  he  was  acting  in  his  capacity  as  president  of  the 
bank;  that  neither  of  the  two  letters  received  by  the  plaintiff  mentioned  the 
fact  that  the  bank  held  the  assignment,  and  that  his  object  in  the  begin- 
ning in  having  the  plaintiff  call  was  to  pay  the  interest  due  on  the  note. 

The  plaintiff  introduced  evidence  tending  to  show  that  the  note  paid  by 
him,  and  purporting  to  be  witnessed  by  a  clerk  of  Jackson,  was  a  forgery, 
and  that  it  was  forged  by  Jackson ;  and  that  the  note  held  by  the  Franklin 
Insurance  Company  was  a  genuine  note.  There  was  no  other  evidence  in 
the  case  which  was  material.  At  the  conclusion  of  the  evidence,  the  de- 
fendant asked  the  judge  to  rule  that  the  plaintiff  could  not  maintain  tliis 
action.  The  defendant  contended  that  the  action,  if  maintainable  against 
anybody',  should  have  been  brought  against  the  Eliot  National  Bank  ;  tiiat 
the  action,  if  otherwise  maintainable  against  the  defendant,  could  not  be 
maintained  merely  on  proof  of  the  note  paid  by  the  plaintiff  being  a  forgery, 
and  on  proof  of  the  notice  of  July  28,  1875,  and  on  proof  that  he  gave 
that  notice  within  a  day  after  going  to  the  Franklin  Insurance  Company's 
office;  that,  as  it  appeared  that  the  transaction  of  the  bank  with  Jackson 
was  bona  fide,  Jackson  had  thus  parted  with  a  title  good  as  to  tlie  Franklin 
Insurance  Company  and  the  plaintiff,  and  that  thus  the  bank  was  damaged 
V)y  the  rclnaso  to  the  plaintiff  of  this  mortgage,  and  tliat  the  notice  of 
July  28,  1875,  was  not  seasonal )]e. 

The  judge  declined  so  to  rule,  but  stated  that  all  the  (pu^stions  of  law 


268  WELCH   V.    GOODWIN.  [CHAP.  II. 

arising  in  the  case  should  be  reported  to  tliis  court,  and  fully  instructed 
the  jury  that  if  the  plaintiff  proved  the  facts  stated  in  his  declaration,  he 
was  entitled  to  recover ;  that  the  first  question  was  whether  the  note  was  a 
forged  note;  that  if  the  jury  found  it  to  be  a  forged  note,  the  plaintiff  was 
entitled  to  recover,  provided  that  he  was  not  informed  of  the  forgery  of 
the  note  until  the  day  or  day  before  he  went  to  counsel,  and  that  in  such 
case  the  notice  of  July  28,  1875,  would  be  seasonable  notice,  and  provided 
that  the  defendant  did  not  disclose  to  him  the  fact  that  he  was  not  acting 
as  principal  in  the  transaction,  and  the  plaintiff  did  not  know  at  the  time 
of  the  payment  of  the  money  to  the  defendant  that  the  defendant  was 
acting  for  the  bank. 

The  jury  returned  a  verdict  for  the  plaintiff  for  $2053;  and  the  judge 
reported  the  case  for  the  determination  of  this  court. 

If  the  court  should  find  upon  this  report  that  the  action  was  maintaina- 
ble, if  at  all,  only  against  the  bank,  or  that  the  notice  was  not  seasonable 
so  as  to  entitle  the  plaintiff  to  recover,  or  that  the  plaintiff  could  not, 
under  the  circumstances  herein  stated,  maintain  his  action  on  proof  of  the 
note  being  a  forgery  and  the  note  held  by  the  Franklin  Insurance  Company 
genuine,  and  proof  that  the  defendant  did  not  disclose  to  the  plaintiff  tlie 
fact  that  he  was  acting  as  principal  in  the  transaction,  judgment  was  to  be 
entered  for  the  defendant;  and  in  case  the  court  should  not  so  find  in  either 
particular  as  matter  of  law,  but  should  find  that  the  instructions  to  the 
jury  were  not  conformable  to  the  requirements  of  the  case,  the  verdict  was 
to  be  set  aside  and  a  new  trial  ordered. 

R.  R.  Bishop  and  F.  Goodwin  for  the  defendant. 

R.  M.  Morse,  Jr.,  and  C.  P.  Greenongh  for  the  plaintiff. 

Lord,  J.  This  case  differs  from  that  of  Carpenter  v.  Northborough 
Katioual  Bank,^  in  two  particulars  only.  The  payment  was  received  by 
the  defendant  in  this  case  as  the  agent  of  another  party.  The  instructions 
of  the  presiding  judge  on  that  subject  were  correct.  One  who  acts  as  the 
agent  of  an  undisclosed  priiKjipal  may  be  treated  as  principal  by  the  party 
with  whom  he  deals. 

The  other  particular,  in  which  the  case  differs  from  that  of  Carpenter  v. 
Northborough  National  Bank,  is  that  the  forger}',  by  means  of  which  Jack- 
son accomplished  the  fraud,  was  that  of  the  name  of  the  plaintiff  himself; 
and  the  only  question  is,  whether  that  fact  of  itself  is  an  absolute  bar  to 
the  right  of  the  plaintiff  to  recover.  \Ve  do  not  understand  that  any 
other  question  than  this  was  presented  to  the  mind  of  the  judge  who  pre^ 
sided  at  the  trial.  If  any  other  questions  were  presented,  it  is  to  be  pre- 
sumed that  proper  instructions  were  given  in  reference  thereto,  and  that 
the  jury  were  required  to  make  the  proper  distinction  and  discrimination 
between  the  payment  upon  a  note,  the  forged  signature  to  which  was  that 
of  the  payer,  and  not  that  of  another  party  to  the  contract. 

1  123  Mass.  G6. 


SECT.  I.]  WELCH   V.   GOODWIN.  269 

It  may  well  be  held  that  a  banking  corporation,  which  issues  notes  as 
currency,  upon  such  plates  and  with  such  securities  as  it  deems  sufficient, 
may  be,  from  reasons  of  public  policy,  estopped  to  deny  the  genuineness 
of  notes  which  it  has  redeemed  as  its  own,  while  such  considerations  would 
have  no  bearing  upon  the  question  whether  an  individual  should  be  per- 
mitted to  show  that  a  signature  which  he  had  treated  as  his  own  was,  in 
fact,  a  forgery.  Nor  is  it  necessary  in  this  case  to  go  so  far  as  to  say,  as 
was  held  by  a  majority  of  the  court  in  National  Bank  of  North  America  v. 
Bangs,^  that  a  bank  may  recover  money  paid  upon  the  forged  check  of  cne 
of  its  depositors.  Tn  both  those  classes  of  cases,  entirely  difl'erent  consid- 
erations may  properly  enter. 

The  question  which  we  are  called  upon  to  decide  is,  whether,  under  any 
circumstances,  a  party  may  recover  back  money  paid  upon  a  security  bear- 
ing a  forged  signature  of  himself,  supposing  it,  at  the  time  of  payment,  to 
be  his  own  genuine  signature.  We  can  have  no  doubt  that  he  may.  This 
is  entirely  clear  in  case  he  was  induced  to  make  the  payment  by  fraud  or 
misrepresentation.  Nor  is  it  necessary  that  fraud  or  misrepresentation 
should  exist.  An  innocent  mistake,  whether  arising  from  natural  or  tem- 
porary infirmity  or  otherwise,  made  without  fault  tipon  his  part,  entitles 
him  to  the  same  relief.  How  far  this  right  would  be  affected  by  neglect 
upon  his  part  to  give  prompt  notice  of  the  mistake,  or  by  any  change  af- 
fecting the  situation  or  rights  of  the  person  to  whom  the  payment  is  made, 
we  are  not  called  upon  to  consider.  Here  notice  was  given  immediately 
upon  discovering  the  forgery.  "Whatever  securities  were  given  up  by  the 
defendant,  in  consideration  of  the  receipt  of  the  forged  note,  had  been  given 
up  before  the  payment  was  made.  The  discharge  of  the  mortgage  by 
Goodwin  was  the  release  of  no  substantial  right.  If  Goodwin  received  any 
title  to  the  mortgage  or  mortgaged  premises  by  reason  of  the  assignment 
to  him,  he  received  it  in  trust  for  another,  and  in  no  event  for  his  own 
benefit.  His  discharge  of  it  was  therefore  no  injury  in  law  to  him.  By 
the  facts  as  they  appear  in  the  report,  his  discharge  of  the  mortgage  effected 
nothing  except  what  by  law  or  in  equity  he  would  be  coniptlled  to  do. 
There  is  no  reason,  therefore,  why  the  plaintiff  should  not  recover ;  and 
there  must  be 

Judgment  on  the  verdict.^ 

1  106  Mass.  441. 

2  Lewis  V.  White's  Bank  of  BafTalo,  27  Hun,  396,  cmtra.  Couf.  Bank  of  tlie  Unitp.l 
States  V.  r.ank  of  Georgia,  10  Wheat.  333 ;  Cook  et  al.  v.  United  States,  <J1  U.  S.  389- 
306,  7.  —  Ed. 


270  CORN   EXCHANGE   BANK   V.   NASSAU   BANK.  [CHAP.  II. 


THE  CORN   EXCHANGE  BANK,   Respondent,   v.   THE 
NASSAU   BANK,    Appellant. 

In  the  Court  of  Appeals  of  New  York,  January  16,  1883. 

[Reported  in  91  New  ITork  Reports,  74.] 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme  Court  in  the 
first  judicial  department,  entered  upon  an  order  made  October  28,  1881, 
which  affirmed  a  judgment  in  favor  of  plaintifiF,  entered  upon  a  verdict. 

It  appears  from  the  complaint  that  on  the  9th  of  November,  1874,  Messrs, 
Knnhardt  &  Co.  were  depositors  with  the  plaintiff,  and  on  that  day  made 
their  check  upon  it,  payable  to  the  order  of  William  Ives  and  John  Waters, 
for  the  sum  of  $19,000.  On  the  next  day  it  was  presented,  and  then,  pur- 
porting to  be  indorsed  by  the  payees,  was  paid  to  the  defendant  and 
charged  to  the  drawer's  account.  On  the  23d  of  March,  1876,  Kuuhardt 
&  Co.  notified  the  plaintiff  that  the  indorsement  was  forged,  and  com- 
menced suit  for  the  recovery  of  the  moneys  withheld  from  them  on  account 
of  said  check,  and  obtained  judgment  therefor,  with  costs.  Notice  of  this 
suit  was  at  its  commencement  given  to  the  defendant,  and  after  payment  of 
the  judgment  the  plaintiff  demanded  repayment  of  the  amount  so  paid, 
and  offered  to  return  the  check  to  it ;  being  refused,  it  brought  this  action. 
Issue  was  taken  by  answer  on  the  question  of  forgery,  and  it  also  set  up 
that  the  check  was  received  by  the  defendant  from  one  B.,  its  depositor,  in 
the  regular  course  of  business,  for  collection,  and  after  collection  credited 
to  him  and  so  became  subject  to  his  check  ;  that  his  account  continued 
and  was  good  for  an  amount  exceeding  the  check  during  the  greater  por- 
tion of  the  time  from  its  date  up  to  and  including  March,  1876;  that  it 
was  retained  by  the  plaintiff  imtil  December  3,  1874,  when  it  returned  it 
to  Kunhardt  &  Co.  ;  that  no  steps  were  in  the  mean  time  taken  by  it  to 
ascertain  the  genuineness  of  the  indorsement,  nor  by  Kunhardt  &  Co., 
until  March  23,  1876;  that  the  defendant's  depositor,  B.  became  insol- 
vent, and  by  reason  of  the  omission  of  the  plaintiff  and  Kunhardt  &  Co.  to 
discover  the  forgery  and  notify  the  defendant,  its  position  had  been  altered 
to  its  injury.  Upon  the  trial  it  was  conceded  that  the  signature  of  the 
payees  of  the  check  was  forged,  and  it  was  proven  that  neither  the  plaintiff 
nor  Kunhardt  &,  Co.  took  any  measiires  to  ascertain  its  genuineness  until 
the  time  above  mentioned.  There  was  also  evidence  from  which  it  was 
apparent  that  if  it  had  been  otherwise  the  forgery  would  have  been  dis- 
covered and  the  defendant,  if  notified  thereof,  might  have  protected  itself 
from  loss  by  calling  upon  its  depositor,  B.  Various  exceptions  were  taken 
during  the  trial,  and  at  its  close  the  defendant  asked  to  go  to  the  jury; 
first,  upon  the  question  "whether  the  defendant  has  not  shown  that  it  was 


SECT.  I.]  CORN   EXCHANGE   BANK   V.    NASSAU   BANK.  271 

injured  to  the  full  extent  of  the  $19,000  and  interest,  or  to  some  part 
thereof,  by  the  plaintiff's  negligence  or  laches  in  failing  to  give  notice  of 
the  alleged  mistake ; "  second,  whether  it  has  not  proved  a  loss  suffered  by- 
it  in  consequence  of  the  mistake  committed  by  the  plaintiff,  to  the  full 
extent  of  the  check  and  interest;  third,  whether,  in  consequence  of  the 
recognition  by  the  plaintiff' of  the  check  in  question,  the  defendant  did  not 
pay  out  to  its  depositor,  B.,  the  moneys  held  on  deposit  for  him  on  that 
and  subsequent  days,  or  some  part  thereof.  This  was  denied.  Thereupon 
.the  court  directed  a  verdict  for  the  plaintiff",  for  $27,553.-43,  made  up,  first, 
of  the  amount  of  the  judgment  recovered  against  the  plaintiflf  by  Kunhardt 
<k  Co. ;  second,  of  plaintiff"s  expenses  in  defending  that  action ;  third,  in- 
terest on  the  judgment.  To  the  allowance  of  each  item  the  defendant 
excepted.  After  verdict,  in  pursuance  of  this  direction,  the  defendant 
moved  upon  the  minutes  for  a  new  trial.  It  was  denied.  An  appeal  was 
taken  from  the  judgment  and  the  order  denying  a  new  trial,  to  the  Gen- 
eral Term,  where  both  were  affirmed,  and  from  its  decision  the  defendant 
appeals  to  this  court. 

Joseph  H.  Choate  for  appellant. 

John  M.  Bowers  for  respondent. 

Danforth,  J.  The  general  question  involved  is  answered  by  a  series  of 
decisions  by  this  court,  in  favor  of  the  respondent.  There  is  no  imputation 
on  the  defendant  with  regard  to  the  way  in  which  it  took  the  check  of 
Kunhardt  &  Co.,  or  the  use  made  of  it,  but  the  plaintiff"  was  thereby  in- 
duced to  part  with  its  money  without  consideration,  and  the  defendant, 
who  received  it,  is  bound  to  make  restitution,  unless  the  plaintiff",  by  some 
act  or  omission  of  its  own,  has  lost  the  right  to  demand  or  sue  for  it. 
White  V.  Continental  Nat,  Bank,*  and  cases  there  cited  by  Allen,  J.* 

The  appellant  contends  that  it  was  the  plaintiff"'s  duty  to  examine  and 
ascertain  the  genuineness  of  the  payee's  indorsement  before  paying  the 
check,  and  that  in  default  of  doing  so,  it  is  as  against  the  defendant  es- 
topped from  denying  its  genuineness  ;  but  the  authorities  are  the  other 
way.  Canal  Bank  v.  Bank  of  Albany  j^  Whitney  v.  Nat.  Bank  of  Potsdam  ;* 
Holt  V.  Ross ; «  The  Union  Nat.  Bank  of  Troy  v.  Sixth  Nat.  Bank  of  N.  Y. ; » 
White  V.  Continental  Nat.  Bank  ;"'  Graves  v.  Am.  Exch.  Bank.' 

The  recovery,  however,  should  have  been  limited  to  the  amount  of 
money  received  by  the  defendant  from  the  plaintiff",  with  simple  interest  to 
the  time  of  the  rendition  of  the  verdict.  The  plaintiff"  paid  the  check  of 
Kunhardt  &  Co.  at  its  own  risk  and  without  authority,  and  could  have  no 
defence  to  their  action.  Hall  v.  Fuller;'  Morgan  v.  The  Bank  of  the  State 
of  N.  Y.'°     There  was  no  privity  between  Kunhardt  <fe  Co.  and  this  defcnd- 

1  64  N.  Y.  316.  »  21  Am.  Rep.  612.  »  1  Hill,  287. 

*  45  N.  Y.  303.  6  54  N.  Y.  472.  «  43  N.  Y.  452. 

'  64  N.  Y.  316.  8  17  jj.  Y.  205.  »  5  B.  &  C.  750. 
"  11  N.  Y.  404. 


272  CORN    EXCHANGE   BANK   V.   NASSAU   BANK.  [CHAP.  II. 

ant.  The  money  received  by  it  was  not  their  money,  and  it  was  not  liable 
to  them.  Their  money  was  still  on  deposit  with  the  plaintiff,  and  the 
plaintiff  owed  them  for  it. 

The  cases  cited  by  the  plaintiff  are  not  analogous.  Elwood  v.  Deifendorf^ 
and  Thompson  v.  Taylor^  stand  upon  the  technical  relation  of  principal 
and  surety,  and  even  then  the  right  to  indemnity  was  held  not  to  extend 
to  expenses  incurred  in  defending  against  the  just  claim  of  the  creditor.  In 
Delaware  Bank  v.  Jarvis^  the  defendant  was  the  vendor  of  the  note  in 
question,  and  had  received  from  the  plaintiff  the  agreed  price  thereof.  The 
costs  in  controversy  were  incurred  in  an  action  which  failed  because  the 
note  was  void  for  usuiy  taken  by  the  vendor,  and  the  recovery  for  costs 
allowed  in  that  action  was  upheld  upon  the  ground  that  the  vendor  of  a 
chose  in  action  impliedly  warrants  its  soundness  and  validit}',  so  far  at  least 
as  he  had  been  connected  with  its  origin.  In  the  other  cases  cited  by  the 
respondent,  the  plaintiff  had  become  liable  to  costs  in  actions  in  which  he 
had  a  remedy  over  against  the  then  defendant,  but  in  none  of  them  did  it 
appear  that  the  action  in  which  the  costs  were  incurred  was  caused  in  whole 
or  in  part  by  the  wrongful  act  or  omission  of  duty  on  the  part  of  the  origi- 
nal defendant.  No  case  I  think  can  be  found  in  which  the  right  to  costs 
of  defending  an  action  so  caused  has  been  upheld,  and  that  is  precisely  the 
position  of  the  plaintiff  here.  It  did  not  buy  or  propose  to  buy  the  check 
of  the  defendants  ;  it  assumed  to  pay  it  as  the  obligation  of  Kunhardt  & 
Co.,  and  when  informed  by  them  that  the  condition  —  indorsement  by 
payee  —  on  which  alone  they  authorized  payment,  had  not  been  performed, 
they  took  the  risk  of  defeat  by  joining  issue  with  their  principals,  and  with- 
held their  money  until  it  could  be  determined.  It  was  the  business  of  the 
plaintiff  as  between  itself  and  its  depositors,  to  see  to  it  that  their  money 
should  not  be  expended  except  as  they  directed  (VVeisser  v.  Denison  ;*  Mor- 
gan V.  Bank  of  State  of  N.  Y.  ;  *  Graves  v.  Am.  Exch.  Bank  ;  ®  Welsh  v. 
German  Am.  Bank  ''),  and  having  failed  to  do  so,  cannot  charge  the  expense 
of  an  action  caused  by  such  default  upon  a  third  party.  The  defendant's 
liability  in  the  present  action  stands  upon  a  different  and  entirely  distinct 
ground,  —  the  receipt  of  money  paid  under  a  mistake  and  without  considera- 
tion.* The  same  principle  forbids  rests  in  the  computation  of  interest  upon 
the  amount  paid.^ 

AW  concur,  except  Rapallo,  J.,  absent. 

Judgment  accordingly. 


1  5  Barh.  398.  «  72  K  Y.  32.  «  20  N.  Y.  226. 

♦  10  N.  Y.  68.  6  11  N.  Y.  404.  ^  17  n.  y.  205.  , 

1  73  N.  Y.  424. 

B  Con/.  Star  Ins.  Co.  v.  New  Hamden  Bank,  60  N.  H.  442.  —Ed. 
8  A  portion  of  the  opinion  relating  to  the  admissibility  of  evidence  has  been  omitted. 
~Ed. 


SECT.  I.]  DE  HAHN   V.  HARTLEY.  273 

DE  HAHN  V.  HARTLEY. 
In  the  King's  Bench,  June  30,  1786. 

[Reported  in  1  Tenn  Reports,  343.] 

This  was  an  action  upon  promises  brought  by  the  plaintiff  (an  under- 
writer) to  recover  back  the  amount  of  a  loss  which  he  had  paid  upon  a 
policy  of  insiu-auce. 

Plea  the  general  issue. 

The  cause  was  tried  before  Buller,  J.,  at  the  sittings  after  last  Easter 
term  at  Guildhall,  when  the  jury  found  a  special  verdict  which  stated  — 

That  the  defendant,  on  the  14th  June,  1779,  at  London,  gave  to  one 
Alexander  Anderson,  then  being  an  insurance  broker,  certain  instructions 
in  writing  to  cause  an  insurance  to  be  made  on  a  certain  ship  or  vessel 
called  the  Juno,  which  were  in  the  words  and  figures  following  :  "  Please  get 
X2000  insured  on  goods  as  interest  may  appear ;  slaves  valued  at  £30  per 
head  ;  comwood  £iO  per  ton  ;  ivory  £20  per  hundred  weight ;  gum  copal 
£5  per  pound  ;  at  and  from  Africa  to  her  discharging  port  or  ports  in  the 
British  West  Indies ;  warranted  copper-sheathed,  and  sailed  from  Liverpool 
with  14  six-pounders  (exclusive  of  swivels,  &c.),  50  hands  or  upwards,  at 
12,  not  exceeding  15  guineas.  Juno —  Beaver.  S.  Hartley  &  Co.,  June 
14th  1779." 

That  the  said  Alexander  Anderson,  in  consequence  of  the  said  written  in- 
structions from  the  said  defendant  on  the  said  14th  June,  1779,  at  London 
aforesaid,  etc.,  did  cause  a  certain  writing  or  policy  of  assurance  to  be  made  on 
the  said  ship  or  vessel  called  the  Juno  in  the  words  and  figures  following  (re- 
citing the  policy);  which  was  upon  any  kind  of  goods  and  merchandises,  and 
also  upon  the  body,  tackle,  apparel,  etc.,  of  and  in  the  ship  Juno,  at  and 
from  Africa  to  her  port  or  ports  of  discharge  in  the  British  West  Indies,  at 
and  after  the  rate  of  £15  per  cent. 

The  verdict,  after  reciting  two  memoranda,  which  are  not  material,  then 
proceeded  to  state,  that  in  the  margin  of  the  said  policy  were  written  the 
words  and  figures  following,  "  Sailed  from  Liverpool  with  14  six-pounders, 
swivels,  small  arms,  and  50  hands  or  upwards ;  copper  sheathed." 

That  on  the  said  14th  June,  1779,  and  not  before,  at  London  aforesaid, 
etc.,  the  plaintiff  underwrote  the  said  policy  for  the  sum  of  £200,  and  re- 
ceived a  premium  af  £31  10s.  Od.  as  the  consideration  thereof 

That  the  said  ship  or  vessel  called  the  Juno,  sailed  from  Liverpool  afore- 
said, on  the  13th  October,  1778,  having  then  only  4G  hands  on  board  her, 
and  arrived  at  Beaumaris,  in  the  isle  of  Anglesea,  in  six  hours  after  her 
sailing  from  Liverpool  as  aforesaid,  with  the  pilot  from  Liverpool  on  board 
her,  who  did  pilot  her  to  Beaumaris  on  her  said  voyage  ;  and  that  at  Beau- 

18 


274  DE    HAHN   V.   HARTLEY.  [CHAP.  II. 

maris  aforesaid  the  said  ship  or  vessel  took  in  six  hands  more,  and  then 
had,  and  during  the  said  voyage  until  the  capture  thereof  hereinafter 
mentioned,  continued  to  have,  52  hands  on  board  her. 

That  the  said  ship  or  vessel  in  the  said  voyage  from  Liverpool  aforesaid 
to  Beaumaris  aforesaid,  until  and  when  she  took  in  the  said  six  additional 
hands,  was  equally  safe  as  if  she  had  had  50  hands  on  board  her  for  that 
part  of  the  said  voyage. 

That  divers  goods,  wares,  and  merchandises  of  the  said  defendatit  of  great 
value,  were  laden  and  put  on  board  the  said  ship  or  vessel,  and  remained 
on  board  her  until  and  at  the  time  of  the  capture  thereof  hereinafter  mentioned. 
And  that  on  the  14th  March,  1779,  the  said  ship  or  vessel,  while  she  remained 
on  the  coast  of  Africa,  and  before  her  sailing  for  her  port  of  discharge  in  the 
British  West  India  Islands,  was,  upon  the  high  seas,  with  the  said  goods, 
wares,  and  merchandises  on  board  her  as  aforesaid,  met  with  by  certain 
enemies  of  our  lord  the  now  king,  and  captured  by  them,  etc.,  and  thereby 
all  the  said  goods,  wares,  and  merchandises  of  the  said  defendant,  so  laden 
on  board  her  as  aforesaid,  were  wholly  lost  to  him. 

That  when  the  said  plaintiff  received  an  account  of  the  said  loss  of  the 
said  ship  or  vessel,  he  paid  to  the  said  defendant  the  said  sum  of  £200  so 
msured  by  him  as  aforesaid,  not  having  then  had  any  notice  that  the  said 
ship  or  vessel  had  only  46  hands  on  board  her  when  she  sailed  from  Liver- 
pool as  aforesaid.     But  whether  upon  the  whole  matter,  etc. 

Law  for  the  plaintiff. 

IVood  for  the  defendant. 

Lord  Mansfield,  C.  J.  There  is  a  material  distinction  between  a 
warranty  and  a  representation.  A  representation  may  be  equitably  and 
substantially  answered ;  but  a  warranty  must  be  strictly  complied  with. 
Supposing  a  warranty  to  sail  on  the  1st  of  August,  and  the  ship  did  not  sail 
till  the  2d,  the  warranty  would  not  be  complied  with.  A  warranty  in  a 
policy  of  insurance  is  a  condition  or  a  contingency,  and  unless  that  be  per- 
formed there  is  no  contract.  It  is  perfectly  immaterial  for  what  purpose  a 
warranty  is  introduced  ;  but,  being  inserted,  the  contract  does  not  exist 
unless  it  be  literally  complied  with.  Now  in  the  present  case,  the  condition 
was  the  sailing  of  the  ship  with  a  certain  number  of  men  ;  which  not  being 
complied  with,  the  policy  is  void. 

AsHHURST,  J.  The  very  meaning  of  a  warranty  is  to  preclude  all  ques- 
tions whether  it  has  been  substantially  complied  with ;  it  must  be  liter- 
ally so. 

BuLLER,  J.  It  is  impossible  to  divide  the  words  written  in  the  margin 
in  the  manner  which  has  been  attempted  ;  that  that  part  of  it  which  relates 
to  the  copper  sheathing  should  be  a  warranty,  and  not  the  remaining  part. 
But  the  whole  forms  one  entire  contract,  and  must  be  complied  with 
throughout.*  Judgment  fo?-  the  plaintiff. 

1  Judgment  affirmed  in  the  Exchequer  Chamber,  2  T.  K.  186.  —  Ed. 


SECT.  I.]  MILNES   V.   DUNCAN.  275 

MILNES  V.  DUNCAN. 

In  the  King's  Bench,  Easter  Term,  1827. 

[Reported  in  6  Barneivall  and  Cresswell,  671.] 

Assumpsit  for  money  had  aud  received.  Plea,  general  issue.  At  the 
trial  before  Lord  Tenterden,  C.  J.,  at  the  Middlesex  sittings,  after  Trinity 
term,  1826,  a  verdict  was  found  fur  the  plaintift"  for  £150,  subject  to  the 
opinion  of  this  court,  on  the  following  case  :  — 

The  plaintiff,  who  was  an  attorney,  resident  at  Matlock  in  Derbyshire, 
was  employed  by  the  defendant,  an  attorney,  resident  in  London,  to  receive 
the  rents  of  an  estate  belonging  to  the  defendant,  situate  near  Matlock. 
In  the  course  of  this  employment  the  plaintiff,  on  the  11th  February,  182G, 
having  previously  received  from  the  tenants  of  the  estate  more  than  the 
sum  of  £150,  he  inclosed  in  a  letter  of  that  date,  to  the  defendant,  the 
following  Irish  bill  of  exchange  for  £150,  in  part  liquidation  thereof:  — 

^150.  Glen  Anne  Mills,  Nov.  24th,  1825. 

Three  months  after  date  pay  to  our  order  £150  sterling,  in  London, 
value  received. 

Atkinson,  Chenmey,  and  Atkinson. 
Mr.  Gerald  Atkinson,  Liverpool. 

The  bill  had  several  indorsements,  but  there  was  nothing  in  those  indorse- 
ments to  show  that  the  bill  had  been  drawn  or  indorsed  in  Ireland.  On  the 
13th  of  February,  the  defendant  acknowledged  the  receipt  of  the  bill.  The 
bill  became  due  on  the  27th  of  February,  but  was  not  then  presented  for  pay- 
ment; and  upon  the  20th  of  March  the  defendant  wrote  the  following  letter 
to  the  plaintiff;  "  I  am  sorry  to  acquaint  you  that  the  bill  for  £150  you  sent 
me  for  the  rent  has  not  been  honored.  This  bill  is  drawn  by  or  in  the  name 
of  Atkinson  and  two  other  names  from  some  mills,  but  the  writing  is  so  bad, 
that  I  cannot  make  the  name  or  the  place  out ;  what  am  I  to  do  in  tliisi" 
The  plaintiff  received  this  letter  on  the  following  day,  and  on  the  same  day 
applied  to  his  immediate  indorsers,  Messrs.  Arkwright  &.  Co.,  bankers  at 
Wirksworth,  to  take  up  the  bill,  which  they  refused  to  do,  because  it  had 
been  so  long  overheld.  On  the  same  day  the  plaintiff  wrote  to  the  defendant, 
and  informed  him  he  had  received  the  bill  for  £150  from  his  bankers,  Ark- 
wright &.  Co.  of  Wirksworth,  and  since  the  receipt  of  the  defendant's  letter 
had  applied  to  them  on  the  subject  of  it,  and  they  refused  to  j)ay  it,  on  the 
ground  that  it  had  been  so  long  overheld.  On  the  25th  of  March  the  de- 
fendant wrote  to  the  phiintiff,  and  said,  it  was  unnecessary  for  him  (defend- 
ant) to  enter  on  the  subject  of  supposed  delay,  as  tlio  bill  was  an  absoluto 
nullity,  by  being  drawn  on  a  stamp  of  inferior  value;  and  he  requested  the 


276  MILNES   V.   DUNCAN.  [OHAP.  II. 

plaintiflF,  with  as  little  delay  as  possible,  to  remit  him  the  amount  of  the 
rent,  in  which  case  he  would  return  the  void  bill.  To  this  the  plaintiff,  on 
the  27th  of  March,  replied,  that  he  had  again  applied  to  Ariiwright  &  Co., 
and  they  had  refused  to  have  anything  to  do  with  tlie  bill,  because  it  had 
been  overheld  for  so  long  a  time,  and  that  he,  the  plaintiff,  had  directed  his 
agent,  Mr.  Forbes,  to  call  upon  him,  defendant,  and  confer  with  him  on  the 
subject,  and  requested  him  to  show  Forbes  the  bill.  A  clerk,  by  the  direction 
of  Forbes,  called  on  the  defendant  on  the  2yth  of  March,  and  after  inspecting 
the  bill,  said  it  was  drawn  on  a  is.  stamp.  On  the  30th  the  defendant  wrote 
to  the  plaintiff  and  informed  him  that  he  declined  presenting  the  illegal  bill 
of  exchange  to  any  person  for  payment,  because  he  might  thereby  subject 
himself  to  a  penalty  as  the  other  parties  on  the  bill  had  ;  and  that  if  his 
(plaintiff's)  bankers  still  obstinately  refused  to  have  anything  to  do  with 
the  illegal  bill,  he  should  resort  to  other  means ;  and  as  his  determination 
was  formed,  it  would  be  better  to  act  on  it  immediately,  and  therefore  de- 
sired the  plaintiff'  to  inform  hira  in  the  course  of  a  post  or  two  if  he  (plain- 
tiff) would  instruct  Forbes  to  appear  for  him.  Upon  the  3d  of  April, 
Forbes's  clerk,  by  the  plaintiff's  direction,  again  called  upon  the  defendant, 
and  informed  him  that  he  had  written  to  the  plaintiff,  and  expected  to 
receive  the  amount  of  the  bill  in  a  post  or  two,  until  which  time  he  requested 
no  proceedings  should  be  taken ;  and  on  the  7th  April,  the  same  clerk,  by 
the  direction  of  Forbes,  paid  the  amount  of  the  bill,  and  at  the  time  of  so 
paying  it,  a  second  time  saw  and  inspected  the  bill,  which  the  defendant 
delivered  up  to  him,  and  gave  the  following  receipt:  "7th  April,  1826, 
received  of  James  Milnes,  Esq.,  by  the  payment  of  Mr,  Forbes,  his  agent, 
two  bank  post  bills,  value  £150,  for  a  void  bill  of  exchange  sent  to  me  by 
Mr.  Milnes  for  rent."  Up  to  this  period  the  bill  in  question  had  been  con- 
sidered and  treated  by  both  parties  as  an  English  bill,  but  it  afterwards 
turned  out  to  be  an  Irish  bill,  and  impressed  with  a  proper  stamp  suitable 
to  such  bill.  Upon  the  discovery  of  which,  on  the  12th  of  April,  the  plain- 
tiff presented  the  bill  at  Messrs.  Williams  for  payment,  which  was  refused 
by  them.  But  if  it  had  been  presented  when  it  became  due,  there  were  at 
that  time  assets  in  their  hands,  and  it  would  have  been  paid.  The  acceptor 
became  bankrupt  on  the  20th  of  June,  1826,  which  was  after  the  present 
action  had  been  commenced. 

Coleridge  for  the  plaintiff. 

Comyn  for  the  defendant. 

Bayley,  J.  I  am  of  opinion  that  the  plaintiff  is  entitled  to  recover. 
There  is  no  doubt  as  to  the  rule  of  law  applicable  to  this  case.  If  a  party 
pay  money  under  a  mistake  of  the  law  he  cannot  recover  it  back.  But  if 
he  pay  money  under  a  mistake  of  the  i-eal  facts,  and  no  laches  are  imputable 
to  him  (in  respect  of  his  omitting  to  avail  himself  of  the  means  of  knowl- 
edge within  his  power),  he  may  recover  back  such  monej'.  In  this  case  the 
question  is,  whether  there  was,  on  the  part  of  the  plaintiff",  at  the  time 


SECT.  I.]  MILNES   V.    DUNCAN.  277 

when  he  made  the  payment,  ignorance  of  the  true  state  of  the  facts,  or  any 
neghgence  imputable  to  him,  in  not  availing  himself  of  the  means  of  knowl- 
edge within  his  power?  The  bill  was  remitted  to  the  defendant  before  it 
was  due.  lie  neglected  to  present  it  for  payment  when  due,  and  held  it  a 
month.  In  consequence  of  that  neglect  the  bill  was  not  paid.  Assuming 
that  there  was  no  defect  in  the  bill  which  rendered  it  void,  but  that  it  was 
a  valid  bill,  the  negligence  of  the  defendant  destroyed  all  right  of  the  plain- 
tifi'to  recover  against  the  prior  indorsers.  The  situation  of  the  parties  was 
varied  by  tliis  negligence  of  the  defendant.  On  the  20th  of  March,  long 
after  the  bill  became  due,  he  communicated  to  the  plaintiff  that  the  bill 
had  not  been  paid.  At  that  time  the  defendant  does  not  appear  to  have 
been  aware  of  any  infirmity  in  the  bill.  The  plaintiff  apprised  Arkwright 
&  Co.  of  this,  and  they  refused  to  pay,  on  the  ground  that  tlie  bill  had  been 
held  over.  The  defendant  then,  for  the  first  time,  insisted  that  the  bill 
was  void,  on  the  ground  that  it  had  an  improper  stamp,  and  he  refused  to 
present  for  payment  what  he  called  the  illegal  bill.  It  is  quite  clear  that 
the  defendant  at  that  time  thought  the  bill  was  improperly  stamped.  The 
circumstance  of  his  being  misled  is  very  strong  evidence  to  show  that  the 
bill  itself  did  not  supply  to  the  holder  adequate  means  of  knowing  whether 
it  was  properlj'  stamped  or  not.  Payment  of  the  amount  of  the  bill  was 
made  by  the  plaintiff,  under  the  impression  that  the  bill  was  void.  That 
may  be  collected  froni  the  receipt,  which  states  the  payment  to  have  been 
made  in  respect  of  a  void  bill  of  exchange.  The  defendant  accepted  the 
money,  on  the  supposition  that  the  bill  was  void.  It  afterwards  turned 
out  that  the  bill  was  drawn  in  Ireland,  that  it  had  an  appropriate  stamp, 
and,  consequenth',  was  a  valid  bill.  The  money  was  therefore  paid  to  and 
received  by  the  defendant,  under  a  mistake  as  to  a  particular  fact,  viz.,  the 
place  where  the  bill  was  drawn.  Then  are  any  laches  imputable  to  the 
jdaintiff?  If  it  had  appeared  on  the  face  of  the  bill  to  have  been  drawn  in 
Ireland,  there  would  perhaps  have  been  laches  on  his  part  in  making  the 
payment,  under  an  idea  that  the  bill  was  drawn  in  England  and  had  an 
improper  stamp,  when  he  might  by  due  inquiry  of  the  prior  indorser  have 
leanied  that  the  bill  was  drawn  in  Ireland  and  was  a  valid  bill.  But 
neither  the  date  nor  the  indorsements  were  calculated  to  raise  in  the  mind 
(»f  any  person  who  saw  the  bill  any  susjjicion  that  it  was  drawn  in  Ireland. 
All  the  circumstances  were  as  much  calculated  to  give  knowledge  to  the 
defendant  as  to  the  plaintiff;  they  did  not  convey  to  the  defendant  or  the 
clerk  of  Mr.  Forbes  any  knowledge  that  the  bill  was  drawn  in  Ireland. 
We  may  fairly  conclude,  therefore,  that  they  did  not  afford  adequate  means, 
of  knowledge.  It  seems  to  me,  that  the  plaintiff,  at  the  time  when  ho 
made  the  payment,  liad  no  adccpiate  means  of  knowing  that  the  bill  was 
not  a  void  bill  ;  and  that  being  so,  it  is  (piite  clear  that  tliis  money  was 
paid  under  a  mistake  of  fact,  and  without  any  laches  on  the  i)art  of  the- 
plaintiff,  and  for  these  reasons  I  think  he  is  entitled  to  recover  it  back. 


278  MILLS   V.   THE   ALDERBURY   UNION.  [CHAP.  IL 

HoLROYD,  J.  I  am  of  the  same  opinion.  In  the  course  of  the  argument 
I  have  entertained  some  doubts,  on  the  ground  that  the  payment  was  made 
and  submitted  to  as  matter  of  right  after  inspection  of  the  bill.  If  the 
money  had  been  paid  after  proceedings  had  actually  commenced,  I  should 
liave  been  of  opinion  that,  inasmuch  as  there  was  no  fraud  in  the  defendant, 
it  could  not  be  recovered  back.  The  defendant  puts  his  right  to  have  the 
amount  paid,  on  the  ground  that  the  bill  was  void  on  account  of  its  being 
on  a  wrong  stamp.  That  was  a  mistake  of  the  fact,  not  of  the  law,  as  it 
would  have  been  if  the  bill  had  been  drawn  in  England  upon  a  proper  stamp. 
It  afterwards  turned  out  that  the  bill  was  drawn  in  Ireland,  and  that  the 
stamp  affixed  to  it  was  the  right  one.  Then  as  the  plaintiff  paid  the  money 
under  the  impression  that  the  bill  was  drawn  in  England,  and  therefore  on 
an  improper  stamp,  it  was  paid  under  a  mistake  of  a  fact,  and  I  incline  to 
think,  that,  according  to  the  authorities,  he  may  recover  it  back. 

LiTTLEDALE,  J.  The  Original  fault  was  with  the  defendant,  for  he  neglected 
to  present  the  bill  for  payment  when  it  became  due.  According  to  general 
principles,  therefore,  the  loss  ought  to  fall  upon  him.  The  defendant,  find- 
ing that  the  indorser  refused  to  pay  it,  represented  to  the  plaintiff  that  it 
was  a  void  bill  in  consequence  of  its  not  having  a  proper  stamp,  and  threat- 
ened to  sue  him.  The  plaintiff,  believing  that  representation  to  be  true, 
consented  to  pay  the  money,  but  it  was  stated  in  the  receipt  that  he  paid 
it  in  respect  of  a  void  bill.  Whether  it  was  valid  or  not  depended  on  a 
fact  of  which  the  plaintiff  was  at  that  time  ignorant,  viz.,  whether  it  was 
drawn  in  England  or  Ireland.  It  is  said  that  he  had  means  of  knowing 
that,  for  he  might  have  inquired  of  the  prior  indorser;  but  there  being 
nothing  on  the  face  of  the  bill  to  lead  him  to  suppose  that  it  was  drawn  in 
Ireland,  he  was  not  bound  to  make  any  inquiry,  and  I  am  of  opinion  that 
he  is  entitled  to  recover  this  money,  on  the  ground  that  it  was  paid  in 
ignorance  of  the  fact. 

Postea  to  the  plaintiff. 


MILLS    V.    THE    GUARDIANS     OF     THE    POOR    OF    THE 
ALDERBURY     UNION. 

In  the  Exchequer,  February  13,  1849. 

[Rpported  in  3  Exchequer  Reports,  590.] 

Assumpsit  for  money  paid.  —  Plea,  «o?i  assiim2)sit. 

At  the  trial,  before  Williams,  J.,  at  the  Wilts  Summer  Assizes,  1848,  it 
appeared  that  the  action  was  brought  to  recover  the  sum  of  £154  12s.  6d., 
which  the  plaintiff  had  paid  to  the  defendants  under  the  following  circum- 
stances :  —  In  1844  the  plaintiff  became  surety  for  William  Bird  Brodie  the 
treasurer   to   the  Alderbury  Union,  by  entering  into  a  bond  jointly  and 


SECT,  I.]  MILLS   V.    THE   ALDERBURY  UNION.  279 

severally  with  Thomas  King  and  William  Bird  Brodie.  The  condition  of 
the  bond  was  as  follows: — "That  the  above-named  treasurer  shall  from 
time  to  time,  and  at  all  times  during  his  continuance  in  the  said  office,  dili- 
gently and  faithfully  discharge  the  duties  thereof,  by  receiving  all  monies 
tendered  to  be  paid  to  the  board  of  guardians,  and  placing  the  same  to 
their  credit,  by  paying  out  of  the  monies  in  his  hands  of  the  guardians  all 
orders  on  him  drawn  on  their  behalf,  and  duly  signed  and  countersigned, 
etc. ;  and  shall  faithfully  discharge  all  the  trusts  to  be  reposed  in  him  in 
virtue  of  the  said  office,  and  on  resigning  or  being  removed  from  the  said 
office,  etc,  shall  account  for  and  pay  over  to  the  said  guardians  all  books 
and  papers,  balances,  monies,  matters,  and  things  belonging,  due,  or  relating 
to  the  said  Union,  etc.,  which  shall  be  in  his  custody,  possession,  or  power, 
in  virtue  of  the  said  office  or  otherwise  howsoever ;  and  in  the  event  of  the 
death,  bankruptcy,  or  insolvency  of  the  said  treasurer  during  his  continu- 
ance in  the  said  office,  his  executors,  administrators,  or  assignees,  as  the 
case  may  be,  or  his  above-named  co-obligers,  or  any  of  them,  shall,  on  a  day 
to  be  fixed  for  that  purpose,  etc.,  account  for,  hand  over,  and  pay  over 
to  the  said  guardians  all  such  books  and  papers,  balances,  monies,  matters 
and  things  as  aforesaid."  At  the  time  the  bond  was  executed,  William 
Bird  Brodie  was  a  partner  in  the  firm  of  William  Bird  Brodie  and  Charles 
George  Brodie,  bankers  at  Salisbury,  and  so  continued  until  a  fiat  in  bank- 
ruptcy issued  against  them  in  October,  1847.  On  the  17th  of  December, 
1847,  the  following  letter  was  written  to  the  plaintiff"  by  the  chairman  of  the 
board  of  the  guardians  of  the  Alderbury  Union  :  — 

BoARD-ROOM,  17th  of  Deceml)er,  1847. 
Sir,  —  On  behalf  of  the  Board  of  Guardians  of  the  Alderbury  Union,  I 
hereby  give  you  notice  that  the  balance  due  from  Mr.  William  Bird  Brodie, 
the  late  treasurer  of  the  Union,  amounts  to  the  sum  of  £154  I2«.  6(/.,  and 
you,  as  one  of  his  sureties,  are  hereby  authorized  and  requested  to  pay,  or 
cause  the  same  to  be  paid,  to  Messrs.  Charles  William  Everett  &  William 
Smith,  bankers,  Salisbury,  the  present  treasurers  of  the  said  Union,  on  the 
31st  day  of  December  inst.,  who  are  duly  authorized  to  give  you  a  discharge 
for  the  amount,  on  behalf  of  the  said  Board  of  Guardians. 

By  order  of  the  Board, 

E.  P.  BucRLEY,  Chairman. 

The  following  letters  were  also  proved  to  have  been  written  to  the  plain- 
tiff" by  Mr.  Whitmarsh,  the  clerk  to  the  defendants :  — 

Aldkrbuky  U.vion,  SALi.sBriiY,  Jan.  15,  1818. 

Dear  Sir, — By  direction  of  the  Board  of  Guardians  I  have  written  to 

the  Poor  Law  Board  respecting  the  propriety  of  the  guardians  proving  on 

the  estate  of  Mr.  Brodie  for  the  balance  due  to  them,  and  am  now  directed 

by  the  Board  of  Guardians  to  state  the  Commissioners'  answer,  which  is, 


280  MILLS   V.   THE   ALDERBURY   UNION.  [CHAP.  II. 

that  by  the  terms  of  the  bond  they  are  entitled  to  call  upon  the  sureties  for 
immediate  payment,  and  they  request  that  you  will  f>ay  tiie  balance  to  the 
treasurers,  Messrs.  Everett  &,  Smith,  not  later  than  Thursday  next. 

I  am,  dear  Sir,  yours  truly. 

W.  D.  WaiTMARSH,  Cle7'k. 

Alderbury  Union,  Salisbury,  Jan.  24,  1848. 
Dear  Sir,  — The  Board  of  Guardians  were  informed  of  the  reason  why 
the  balance  due  from  the  sureties  of  Mr.  Brodie  was  not  paid,  and  of  your 
request  for  a  short  time  longer  to  make  an  arrangement  with  your  brother 
surety,  Mr.  King ;  and  I  am  now  directed  to  state,  that  the  Board  fire  un- 
willing to  press  the  sureties  for  payment ;  but  at  the  present  time  they 
have  no  funds  in  the  treasui'er's  hands,  and  therefore  they  must  requesl' 
that  the  balance  be  paid  on  or  before  Thursday  next. 
I  am,  dear  Sir,  yours  very  truly, 

W.  D.  "VVhitmarsh,  Clerh 

The  following  memorandum  was  indorsed  upon  the  bond  :  — 

Feb.    3,  1848. 
This  bond  is  given  up  to  Stephen  Mills,  Esq.,  one  of  the  wi^hin-named 
sureties,  on  his  payment  of  X154.  12s.  6d.,  the  balance  due  from  the  above' 
named  W.  B.  Brodie,  the  late  treasurer  of  the  Alderbury  Union. 

The  minute  books  of  the  defendants  were  then  called  for  and  produced  ; 
they  contained  the  following  entry  :  — 

*■  That  the  sureties  of  Mr.  Brodie  had  paid  the  amount  due  from  him,  and 
that  the  bond  had  been  given  up  to  be  cancelled." 

It  was  then  objected  that  this  minute  proved  a  joint  payment  by  two 
sureties,  and  therefore  that  King,  the  co-surety,  should  have  been  joined  as  a 
plaintiff  in  the  action.  The  learned  judge  reserved  the  point,  and  evidence 
was  then  given  to  show  that  William  B.  Brodie  alone  had,  in  fact,  never  been 
in  exclusive  receipt  or  control  of  the  monies  belonging  to  the  defendants, 
who  had  always  kept  an  account,  like  any  other  customer,  with  the  firm  of 
William  B.  Brodie  &  Charles  George  Brodie  ;  that  <-he  printed  contribution 
warrants  issued  by  the  defendants  directed  the  overseers  of  the  respective 
parishes  in  the  Union  to  pay  to  Messrs.  Brodie  &  Co.,  of  Salisbury,  at  their 
bank,  the  amount  towards  the  relief  of  the  poor,  and  for  defraying  the 
general  expenses  of  the  Union ;  that  the  payments  were  made  accordingly, 
and  in  like  manner;  that  the  cheques  drawn  by  the  defendants  were  ad- 
dressed "  Salisbury  Bank,"  and  required  "Messrs.  W.  B.  Brodie  &  C.  G. 
Brodie  "  to  pay,  etc. 

It  was  contended,  as  the  plaintiff  was  not  aware  of  these  facts  at  the 
time  of  his  making  the  payment  to  the  defendants,  and  as  he  was  surety 
for  W.  B,  Brodie  only,  that  he  was  not  liable  to  make  good  a  deficiency  in 


SECT.  I  ]  MILLS   V.   THE   ALDERBURY   UNION.  281 

monies  paid  to  W.  B.  Erodie  and  C.  G.  Brodie  jointly.  The  plaintiff  had 
a  verdict  for  £154  12s.  Gd.,  leave  being  reserved  to  the  defendants  to  move 
to  enter  a  nonsnit,  if  the  court  should  think  there  was  no  evidence  to 
support  the  verdict. 

A  rule  was  obtained  accordingly  in  the  following  term,  against  which 
cause  was  now  shown  by  Croivda'  and  Barstow. 

Montague  Smith,  in  support  of  the  rule. 

Parke,  B.  The  rule  must  be  discharged.  It  was  granted  on  two  points: 
first,  whether  the  action  could  be  brought  by  the  plaintiff  alone ;  secondly, 
whether  the  action  was  maintainable  at  all.  With  respect  to  the  first  point, 
I  do  not  see  how,  under  the  circumstances,  the  other  surety  could  have 
been  joined.  The  plaintiff  can  only  recover  what  he  has  paid;  and  the 
question  is,  whether  there  is  evidence  that  he  has  paid  the  whole  or  a  part 
of  the  money.  As  evidence  of  payment,  a  letter  of  the  17th  December, 
1847,  was  put  in,  requiring  the  plaintiff  to  pay  the  balance  due  from  the 
late  treasurer  to  Messrs.  Everett  k  Smith,  bankers,  adding,  "  who  are  duly 
authorized  to  give  you  a  discharge  for  the  amount,  on  behalf  of  the  board 
of  guardians."  Now,  if  that  document  meant  only  that  payment  to  the 
bankers  shall  be  payment  to  the  board,  it  does  not  make  the  receipt  of 
the  bankers  the  receipt  of  the  board ;  but  if  the  meaning  iis,  "  pay  to  the 
bankers,  and  their  receipt  shall  be  our  receipt,"  then  there  is  evidence  that 
the  money  was  paid  by  the  plaintiff.  In  my  opinion,  the  document  must 
be  construed,  not  merely  as  meaning  that  payment  to  the  bankers  shall  be 
a  payment  to  the  board,  but  that  the  receipt  of  the  bankers  shall  be  the 
receipt  of  the  board  ;  and,  consequently,  there  is  evidence  that  the  plaintiff 
paid  the  whole  money,  and  therefore  is  alone  entitled  to  recover  it  back. 

Then  comes  the  question,  whether  the  money  has  been  paid  under  a  mis- 
take as  to  the  facts.  I  agree  that  the  plaintiff  was  not,  under  the  terms  of 
the  bond,  bound  to  make  the  payment.  The  condition  might  have  been 
broken  though  no  monies  were  received  by  Brodie,  the  treasurer,  alone ; 
but  we  must  look  to  the  letter  of  the  defendants,  and  the  ground  on  which 
they  say  that  he  misapplied  the  money  received  by  him  for  the  use  of  the 
board,  and  which  the  plaintiff,  as  surety,  was  bound  to  repay  on  demand. 
The  language  is,  "I  hereby  give  you  notice  that  the  balance  due  from 
Mr.  William  Bird  Brodie,  the  late  treasurer  of  the  Union,  amounts  to  the 
sum  of  £152  12«.  M.,  and  you,  as  one  of  his  sureties,  are  hereby  authorized 
and  requested  to  pay,"  etc.,  that  is,  that  William  Bird  Brodie  has  received 
a  sum  of  money,  for  which  he  has  not  accounted.  The  plaintiff,  on  receipt 
of  this  letter,  believing  himself  responsible  as  for  monies  received  by 
William  Bird  Brodie,  paid  the  sum  demanded.  Then,  does  he  show  tli.it 
he  was  not  bound  to  pay  iti  He  proves  that  William  Bird  Brodie  indi- 
vidually and  personally  received  none  of  the  money,  but  that  it  was  paid 
into  the  banking  firm  of  15rodio  &  Co.,  as  by  any  ordinary  customer  of  tin; 
bank.     For  monies  so  paid  to  two  or  more  jKirties,  the  surety  for  one  is  iK.t 


282  MILLS   V.   THE   ALDERBURY  UNION.  [CHAP.  II. 

responsible,  according  to  the  cases  cited  of  Bellairs  v.  Ebsworth  and  The 
London  Assurance  from  Fire  v.  Bold.  Those  cases  show,  that  if  a  person 
is  surety  for  another  for  the  due  accounting  for  monies  received  by  him, 
the  receipt  of  monies  by  that  person  and  his  partner  is  not  the  same  as  the 
receipt  by  him  alone,  because  the  surety  may  be  willing  to  be  accountable 
for  one  individual,  but  not  for  him  and  his  partner ;  and  a  payment  to  one 
partner  is  a  payment  to  both.  It  is  said  that  those  cases  are  distinguisha- 
ble, because  there  another  agent  was  appointed ;  but  I  do  not  think  that 
makes  any  difference ;  for,  though  no  fresh  treasurer  could  be  appointed, 
the  monies  were  not  received  by  William  Bird  Brodie  alone,  but  by  hira 
and  another  person  in  copartnership,  whom  the  guardians  chose  to  treat  as 
joint  treasurer  of  the  Union.  If  they  did  that  without  authority,  the  case 
is  not  altered,  for  the  payments  were  never  made  to,  or  under  the  control 
of,  the  duly  appointed  treasurer.  Prima  facie  the  receipt  of  the  firm  is 
not  the  receipt  of  the  treasurer,  and  the  defendants  should  have  gone  on 
to  show  a  constructive  payment  to  the  treasurer.  If,  for  instance,  William 
Bird  Brodie  had  said,  "  Instead  of  paying  the  money  to  me,  pay  it  into  the 
bank,"  he  would  have  been  responsible  ;  or  if  he  had  said,  "  In  order  to 
facilitate  the  account,  I  will  keep  the  account  with  my  banker  in  my  own 
name  ;  "  —  if  that  had  been  proved,  it  might  have  been  said  that  he  was, 
as  treasurer,  keeping  the  account  of  the  Union.  Or  again,  when  money 
was  offered  to  William  Bird  Brodie  at  the  counter  of  the  bank,  he  might 
have  said,  "  Put  it  to  the  defendant's  account ; "  though,  in  that  case,  if  the 
guardians  paid  the  money  to  Brodie  &  Co.  as  their  bankers,  the  sureties 
would  not  have  been  responsible.  Here  the  defendants  drew,  in  their  own 
names,  cheques  on  the  banking  firm,  treating  them  as  their  joint  treasurers ; 
and  from  that  it  would  seem  that  they  agreed  to  the  monies  being  paid  into 
the  bank  to  their  credit,  just  as  any  other  customer.  The  payments  not 
having  been  made  to  the  treasurer,  but  to  the  bank,  I  think  the  plaintiff 
has  made  out  a  sufficient  case  that  he  was  not  liable  to  pay ;  and,  conse- 
quently, having  paid  under  a  mistake  as  to  the  facts,  he  is  entitled  to 
recover. 

EoLFE,  B.,  and  Platt,  B.,  concurred.  Bute  discharged. 


SECT.  I.l  MAYER   V.   THE   MAYOR,   ETC.,   OF  NEW   YORK.  283 


BERNHARD    MAYER,   Respondent,   v.   THE  MAYOR,   ALDERMEN, 
AND  COMMONALTY  of  the  CITY  of  NEW  YORK,  Appellant. 

In  the  Court  of  Appeals  of  New  York,  December  21,  1875. 
[Reported  in  63  N'ew  York  Reports,  455.] 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme  Court  in  the 
first  judicial  department,  affirming  a  judgment  in  favor  of  plaintiff,  entered 
upon  a  verdict. 

This  action  was  brought  to  recover  back  money  alleged  to  have  been  paid 
to  defendant  by  mistake. 

Plaintiff  was  the  owner  of  lot  No.  28,  in  block  98,  fronting  on  Fifty-first 
street,  in  the  City  of  New  York.  Said  lot  was  assessed  for  the  expense  of 
paving  said  street.  An  assessment  was  also  made  at  the  same  time  upon 
the  adjoining  lot,  No.  27,  which  was  owned  by  another  person.  Plaintiff 
received  a  notice  issued  from  the  bureau  of  collection  of  assessments, 
directed  to  the  owner  of  lot  27,  stating  the  making  of  the  assessment 
thereon,  the  amount  of  the  same,  and  that  payment  of  the  assessment 
would  be  expected  by  a  time  specified.  Before  the  time  specified  plaintiff 
went  to  the  office  of  the  collector  of  assessments,  presented  the  notice,  paid 
the  assessment  therein  specified,  and  took  a  receipt.  On  discovering  the 
mistake  he  presented  a  claim  for  repayment  of  the  money  to  the  comptroller, 
which  was  not  allowed.  Defendant's  counsel  on  the  trial  moved  to  dismiss 
the  complaint  upon  the  ground  that  plaintiff  could  not  recover  back  the 
money,  having  paid  it  voluntarily,  and  there  being  no  mutual  mistake. 
The  motion  was  denied,  and  defendant's  coimsel  duly  excepted. 

£>.  J.  Dean  for  the  appellant. 

E.  0.  Andrews  for  the  respondent. 

Andrews,  J.  The  general  rule  that  money  paid  under  a  mistake  of  a 
material  fact  may  be  recovered  back,  although  there  was  ncghgence  on  the 
part  of  the  person  making  the  payment,  is  subject  to  the  quahlication  that 
the  payment  cannot  be  recalled  when  the  position  of  the  party  receiving  it 
has  been  clianged  in  consequence  of  the  payment,  and  it  woukl  be  inequita- 
ble to  allow  a  recovery.  The  person  making  the  payment  must,  in  that 
case,  bear  the  loss  occasioned  by  his  own  negligence.  If  circinnstaiiccs 
exist  which  take  the  case  out  of  the  general  rule,  the  burden  of  proving 
them  rests  upon  the  party  resisting  their  payment. 

The  rule,  with  its  limitation,  has  come  under  discii.ssion  in  several  recent 
cases  in  this  court,  and  it  is  unnecessary  to  restate  the  grounds  upon  which 
it  rests.* 

1  The  learned  judge  here  cited  a  number  of  cases.  —  En. 


284  MAYER   V.   THE    MAYOR,    ETC ,   OF   NEW   YORK.  [CHAP.  II. 

The  plaintiff,  who  was  the  owner  of  lot  28,  in  block  98,  on  Fifty-first 
street,  in  the  City  of  New  York,  was  assessed,  on  the  9th  day  of  January, 
1871,  for  the  expense  of  paving  the  street,  and  the  assessment  was  con- 
firmed and  became  a  lien  on  the  premises.  He  afterwards  received  a 
notice,  issued  from  the  bureau  of  collection  of  assessments,  directed  to  the 
owner  of  the  adjoining  lot  (27),  stating  that  an  assessment  had  been  made 
thereon  for  the  improvement,  and  the  amount  of  the  same,  and  notifying 
the  person  to  whom  it  was  addressed  that  payment  of  the  assessment  would 
be  expected  to  be  made  by  a  time  stated.  The  plaintiff,  supposing  that  the 
notice  related  to  an  assessment  on  his  lot,  afterwards,  and  before  the  time 
named  for  the  payment,  went  to  the  office  of  the  collector  of  assessments 
and  presented  the  notice  and  paid  the  assessment  therein  mentioned  to 
the  proper  officer  and  took  his  receipt.  On  subsequently  ascertaining  the 
mistake  he  presented  a  claim  for  repayment  to  the  comptroller,  and  the 
same  not  being  allowed,  brought  this  action  to  recover  the  sum  so  paid  by 
liim. 

The  circumstances  bring  the  case  within  the  general  rule,  which  author- 
izes a  recovery  for  money  paid  by  mistake.  The  plaintiff  was  not  liable  to 
pay  the  assessment  on  lot  27,  and  he  paid  it  in  ignorance  of  fact,  supposing 
that  the  notice  related  to  the  assessment  on  lot  28,  and  intending  to  pay 
the  assessment  on  his  own  premises.  It  does  not  appear  that  the  assess- 
ment on  lot  27  was,  in  fact,  cancelled  of  record,  or  that  the  evidence  that  the 
lien  was  discharged,  authorized  to  be  given  by  section  16,  chapter  579  of 
the  Laws  of  1853,  was  required  or  was  furnished.  If  an  entry  was  made 
of  its  payment,  no  reason  is  shown  why,  upon  discovering  the  mistake,  it 
might  not  have  been  corrected,  and  the  collection  enforced  against  the 
person  liable  to  pay  the  assessment,  or  upon  his  default,  by  a  sale  of  the 
land  in  respect  to  which  the  assessment  was  made.  It  does  not  appear 
that  there  has  been  any  change  of  title  to  lot  27,  and  the  rights  of  sub- 
sequent purchasers  are  not  in  question.  The  plaintiff  did  not  intend  to 
discharge  the  liability  of  the  owner  of  that  lot  when  he  paid  the  assess- 
ment, and  although  the  money  was  received  by  the  city  in  discharge  of  the 
assessment  on  lot  27,  it  could,  on  being  apprised  of  the  mistake,  have 
returned  the  money  to  the  plaintiff,  and  been  restored  to  its  original 
position.     The  ]\Iayor  v.  Colgate.^ 

The  city  received  the  money  upon  a  lawful  demand,  but  from  a  person 
■who  was  not  legally  liable  to  pay  it,  and  we  do  not  find  that  the  circum- 
stance that  money  paid  by  mistake  is  received  upon  a  valid  claim  in  favor 
of  the  recipient  against  a  third  person  prevents  a  recovery  back,  provided 
the  claim  against  the  party  who  ought  to  pay  it  is  not  thereby  extinguished 
or  its  collection  prevented.'^ 

The  claim  is  made,  on  behalf  of  the  city,  that  the  money  collected  on 
local  assessments  is  not  collected  for  the  benefit  of  the  city,  or  received  into 

1  12  N.  Y.  HO.  2  43  N.  Y.  452  ;  14  id.  432. 


SECT.  I.]      TALBOT  V.   NATIONAL   BANK   OF  THE   COMMONWEALTH.         285 

the  treasury  for  its  use;  and  that  the  city  in  making  local  improvements 
acts  for  the  benefit  and  in  behalf  of  the  owners  of  the  land  on  which  the 
assessment  is  made.  The  paving  of  streets,  the  coustructiou  of  sewers, 
and  works  of  like  character  within  the  city,  are  spoken  of  as  local  improve- 
ments, but  they  are  instituted  by  the  corporation,  and  are  public  improve- 
ments as  strictly  as  any  other  improvements  undertaken  by  the  corporation. 
The  statute,  in  view  of  the  special  benefits  which  are  supposed  to  result  from 
them  to  the  owners  of  lands  near  which  they  are  made,  imposes  the  e.Np.'nscs 
incurred  in  making  them  in  whole,  or  in  part,  upon  the  property  within 
the  district  specially  benefited.  But  the  work  is  a  public  work.  The  city 
contracts  for  the  performance,  and,  by  chapter  3'J7,  Laws  of  1SD2,  and 
subsequent  statutes,  is  authorized  to  borrow  the  money  upon  its  bonds  to 
pay  in  the  first  instance  the  expenses  incurred  in  prosecuting  it.  The  city 
treasury-  is  entitled  to  ultimate  reimbursement  from  the  owners  of  lands 
which  may  be  locally  assessed,  and,  upon  their  default  to  collect  the  expen- 
ses, by  a  sale  of  the  land ;  but  it  receives  the  money  collected  througli  local 
assessments  in  its  own  right,  and  not  as  agent  or  depositary,  either  of  the 
land  owners  or  the  holders  of  the  bonds. 

We  are  of  opinion  that  no  obstacle  to  the  plaintiff's  recovery  exists,  and 
that  the  defendant  cannot  justly  claim  to  retain  the  money  received  under 
the  circumstances  disclosed. 

The  judgment  of  the  General  Term  should  be  affirmed,  with  costs. 

All  concur. 

Judgment  affirmed. 


WILLIAM  H.   TALBOT  and  Others  v.  NATIONAL  BANK   OF 
THE  COMMONWEALTH. 

In'  the  Supreme  Judicial  Court  of  INIassachusetts,  June  30,  1880. 

[Reported  in  129  Massachusetts  Reports,  G7.] 

Contract  for  money  had  and  received.  Writ  dated  June  11,  1879. 
The  case  was  submitted  to  the  Superior  Court  on  agreed  fiicts,  in  substance 
as  follows  :  — 

On  September  15,  1877,  the  plaintiffs  were  the  owners  of  a  promissory 
note  for  $042.79,  dated  Kalamazoo,  Michigan,  September  10,  1877,  i)aya- 
ble  five  months  after  date  to  the  order  of  Patrick  Reynolds,  signed  by  John 
J.  Mullen,  and  indorsed  liy  Reynolds  and  by  the  plaintiffs.  On  the  above 
day,  the  plaintiffs  offered  the  note,  with  their  indorsement,  to  the  defendant 
banl:,  of  which  they  were  customers,  for  discount,  in  the  ordinary  comsc  of 
business;  and  the  same  was  discounted  by  the  defendant,  and  the  plaintiffs 
received  the  amount  of  the  note  less  the  rate  of  discount  agreed  on.  On 
the  day  the  note  matured,  the  maker  occupied  a  house  in  Kalamazoo  and 


286      TALBOT  V.    NATIONAL   BANK  OF  THE   COMMONWEALTH.      [CHAP.  II. 

had  had  a  place  of  business  there,  but  did  not  have  any  there  on  that  day. 
The  defendant,  before  the  maturity  of  the  note,  sent  it  to  a  bank  in  Kala- 
mazoo for  collection,  and,  not  having  been  paid  at  maturity,  the  note  was 
protested  by  a  notary,  who  stated  in  his  protest  that  he  presented  the  note 
at  a  certain  bank  and  "  at  the  store  lately  occupied  by  John  J.  Mullen,  and 
demanded  payment  thereof,  which  was  refused ; "  and  that  due  notice 
"  that  such  note  had  been  thus  presented  for  payment,  and  that  payment 
had  been  thus  demanded  and  refused,"  and  that  the  holder  of  the  note 
would  look  to  the  indorser  for  payment,  was  sent  by  mail  to  the 
indorsers. 

The  note,  after  protest,  was  returned  to  the  defendant,  with  the  protest 
annexed  ;  and  the  defendant  called  upon  the  plaintiffs  as  indorsers  to  pay 
the  same.  The  plaintiffs,  believing  that  a  proper  demand  had  been  made 
on  the  maker,  and  that  the  note  had  been  duly  protested,  paid  the  defend- 
ant the  amount  of  the  note,  and  took  away  the  note  with  the  protest  an- 
nexed, the  same  being  given  up  to  them  by  the  defendant  simultaneously 
with  the  payment  of  the  money.  The  plaintiffs  did  not  know  the  contents 
of  the  protest,  but,  relying  on  the  notice  of  dishonor  sent  them  and  the 
claim  of  the  defendant,  believed  that  the  protest  was  good,  and  that  they 
were  bound  to  pay  the  note  to  the  defendant.  They  then  brought  suit 
against  the  first  indorser,  Eeynolds,  at  Kalamazoo,  and,  at  the  trial  of  that 
action,  the  above  facts  as  to  the  protest,  then  first  known  to  the  plaintiffs, 
appearing,  the  court  ruled  that  the  note  had  not  been  properly  protested, 
and  that  a  verdict  for  the  defendant  would  be  ordered.  Thereupon  the 
plaintiffs  became  nonsuit ;  and,  after  a  tender  of  the  note  to  the  defend- 
ant, brought  this  action. 

The  Superior  Court  ordered  judgment  for  the  plaintiffs  for  $713.48; 
and  the  defendant  appealed  to  this  court. 

J.  R.  Bullard  for  the  plaintiffs. 

C.  H.  Drew  for  the  defendant. 

SouLE,  J.  When  the  note  matured,  the  maker  occupied  a  house  in  Kala- 
mazoo. He  had  no  place  of  business,  and  the  note  did  not  specify  any  place 
of  payment.  It  was  payable,  therefore,  at  his  house.  It  was  not  presented 
there  for  payment,  nor  to  the  maker  elsewhere.  The  presentment  at  the 
place  in  Kalamazoo  which  had  formerly  been  occupied  as  a  place  of  busi- 
ness by  the  maker,  without  any  inquiry  as  to  his  place  of  residence,  was 
not  a  good  presentment,  and  did  not  show  such  diligent  search  for  the 
maker,  and  failure  to  find  him,  as  would  excuse  a  want  of  presentment  of 
the  note  and  demand  of  payment.  Garland  v.  Salem  Bank  ;^  Granite  Bank 
V.  Ayers  ;  ^  Porter  v.  Judson.'  The  note,  therefore,  was  not  dishonored, 
and  the  plaintiffs  were  discharged  from  all  liability  as  indorsers.  They 
paid  it  under  the  supposition  that  it  had  been  dishonored,  and  that  their 
liability  had  been  fixed.     They  had  received  notice  that  it  had  been  dis- 

1  9  Mass.  408.  «  16  Pick.  392.  ^  i  Gray,  175. 


SECT.  I.]  MALCOLM   V.   FULLARTON.  287 

honored,  signed  by  the  notary,  and  forwarded  to  them  by  the  defendant 
bank.  They  had  the  right  to  rely  on  this  notice,  thus  forwarded,  as  true, 
and  the  payment  made  by  them  in  consequence  was  a  payment  made  under 
a  mistake  of  fact  on  their  part,  and  they  are  entitled  to  recover  the  amount 
paid  in  this  action.     Garland  v.  Sulem  Bank.^ 

Interest  on  the  amount  paid  by  the  plaintiffs  is  recoverable  only  as  dam- 
ages for  the  wrongful  detention  of  the  money  by  the  defendant.  Nothing 
in  the  facts  agreed  shows  that  the  plaintiffs  made  any  demand  for  the 
money  before  bringing  suit.  Under  these  circumstances,  interest  should 
be  computed  from  the  date  of  the  writ  only.     Ordway  v.  Colcord.* 

Judgment  for  the  plaintiffs  accordingly. 


MALCOLM    AND    Another,    Assignees    of    MAYNE    and    GRAHAM, 
Bankrupts,   v.    FULLARTON. 

In  the  King's  Bench,  November  8,   1788. 

[RepoHed  in  2  Term  Reports,  645.] 

Upon  a  rule  to  show  cause  why  the  award  which  had  been  made  in  this 
cause  should  not  be  set  aside,  it  appeared  that  there  had  been  accounts 
between  the  bankrupts  and  the  defendant,  and  that  the  latter  had  paid 
1500/.  after  the  bankruptcy  to  the  plaintiffs  as  assignees,  which  was  only  a 
part  of  the  sum  they  demanded.  The  present  action  had  been  brought  to 
recover  a  further  sum  claimed  as  due  from  the  defendant  to  the  bankrupts* 
estate;  to  which  the  general  issue  only  had  been  pleaded;  and  pending  the 
suit,  it  was  agreed  to  refer  all  matters  in  difference  between  the  parties  in 
the  cause  to  the  determination  of  an  arbitrator,  who,  upon  examination  of 
all  the  accounts  between  the  parties,  awarded  the  sum  of  700/.  to  be  paid 
by  the  plaintiffs  to  the  defendant  on  a  particular  day. 

Bearcroft,  Garrow,  and  Park,  for  the  plaintiffs. 

Erskine  and  Adam  for  the  defendant. 

Lord  Kenyon,  C.  J.  The  first  objection  which  has  been  raised  against 
this  award,  namely,  that  the  arbitrator  has  exceeded  his  authority,  would, 
if  it  were  well  founded,  be  destructive  of  it.  But  that  is  answered  by 
reading  the  terms  of  the  reference ;  by  which  it  appears  that  "  all  matters 
in  difference  between  the  parties  in  the  cause  "  were  referred.  "The  parties 
in  tlie  caiise"  is  merely  a  description  of  the  persons,  and  not  of  the  subject 
matter  in  dispute.  And  indeed  this  is  the  constant  form  of  these  submis- 
sions to  awards,  which  are  intended  to  include  all  matters  in  dispute  between 
the  parties.  With  respect  to  the  latter  objection,  that  the  arbitrator  has 
awarded  a  particular  sum  to  be  paid  in  solido  on  a  certain  day,  instead  of 

1  9  Mass.  408.  '■'  1^  ^^11^">  '^^- 


288  MALCOLM   V.    FULLAETON.  [CHAP.  IL 

directing  him  to  go  before  the  commissiouei-s  to  prove  this  debt ;  if  this 
had  been  a  debt  due  from  the  bankrupt  to  the  defendant,  the  objection 
would  have  holdeu;  but  this  debt  was  not  contracted  before  the  bankruptcy, 
for  the  defendant  inadvertently  paid  a  sum  of  money  to  the  assignees  after 
the  bankruptcy,  which  it  now  appears  was  not  due  to  them.  That  sum 
therefore  could  not  be  proved  under  the  commission ;  and  the  arbitrator 
could  only  award  that  the  sum  which  was  overpaid  to  the  assignees  should 
be  repaid  by  them  to  the  defendant  in  solido. 

AsHHURST,  J.  I  cannot  conceive  that  any  injustice  has  been  done  to  the 
parties  in  this  cause.  The  award  recites  that  there  was  an  account  between 
the  parties,  consisting  of  items  on  both  sides,  and  that  a  gross  sum  was 
paid  by  the  defendant  to  the  assignees.  And  it  now  appears  that  part  of 
that  sum  was  paid  on  a  mistake  ;  therefore  that  money  was  received  by  the 
assignees  in  their  own  wrong ;  it  never  constituted  a  part  of  the  bankrupt's 
estate.  The  defendant  is  of  course  entitled  to  receive  that  sura  in  gross; 
and  if  the  arbitrator  had  awarded  otherwise,  he  would  have  done  great 
hijustice. 

BuLLER,  J.  The  first  question  which  has  been  made  in  this  case,  is  of 
very  general  importance,  because  it  extends  to  all  references,  and  must 
settle  the  meaning  of  the  terms  of  a  general  reference.  This  question  came 
before  the  court  in  the  case  of  Bridgewater  v.  Gandersequi,^  where  the 
words  in  the  rule  of  reference  were  similar  to  the  present.  Erskine  then 
contended  that  those  words  only  included  the  matters  in  dispute  in  that 
cause ;  and  that  the  arbitrator  had  exceeded  his  authority,  in  taking  into 
consideration  any  other  matters  in  difference  between  the  parties.  Howarth, 
in  answer,  insisted  that  the  terms  of  the  reference  were  descriptive  of  the 
parties  in  the  cause,  and  not  of  the  particular  cause  between  the  parties ; 
and  of  that  opinion  was  the  court.  Here  therefore  is  an  express  determi- 
nation on  the  point.  On  inquiry  I  find  that  the  difference  in  practice, 
where  the  parties  intend  to  refer  only  the  cause,  or  all  matters  in  differ- 
ence between  the  parties,  consists  in  transposing  the  words ;  in  the  first 
instance  the  words  in  the  rule  of  reference  are,  "  all  matters  in  difference 
in  this  cause  between  the  parties  ; "  and  in  the  latter,  "  all  matters  in 
difference  between  the  parties  in  this  cause  ; "  as  in  the  present  case.  An 
argument  has  been  drawn  at  the  bar  from  the  subsequent  words,  by  which 
it  is  agreed  that  the  costs  should  abide  the  event  of  the  cause ;  from  which 
it  was  contended  that  only  the  matters  in  that  particular  cause  were  in- 
tended to  be  referred.  But  I  do  not  think  that  those  words  will  warrant 
the  conclusion  which  has  been  drawn  from  them  ;  for  it  is  well  known  that 
the  costs  are  subject  to  the  will  of  the  parties  ;  and  sometimes  they  are 
referred  in  one  form,  and  sometimes  in  another.  The  next  question  is, 
whether  the  arbitrator,  by  his  award,  has  infringed  on  the  policy  of  the 
bankrupt  laws,  and  altered  the  distribution  of  the  bankrupt's  effects.     I 

1  Tr.  22  Geo.  3,  B.  R. 


SECT.  I.]  IRVING   V.   RICHARDSON.  289 

am  clearly  of  opinion  that  this  award  does  not  interfere  with  the  bankrupt 
laws.  The  sum  awarded  to  be  paid  by  the  assignees  to  the  defendant  was 
never  paid  into  tlie  bankrupt's  hands  ;  it  was  part  of  a  sum  paid  after  the 
bankruptcy,  and  the  defendant  could  never  have  proved  it  under  the  com- 
mission. Then  it  stands  thus  :  money  has  been  paid  into  the  hands  of  the 
plaintiffs  which  was  not  due  ;  and  only  so  much  of  it  as  was  due  at  the 
time  to  be  considered  as  part  of  the  bankrupt's  estate.  Therefore  the  arbi- 
trator has  done  right  in  awarding  the  700/.  to  be  paid  by  the  assignees  to 
the  defendant.  The  only  point  upon  which  I  had  any  doubt  was,  whether 
the  defendant  were  bound  by  the  payment  of  1500/.  which  he  made  to  the 
assignees  after  they  had  delivered  to  him  their  account,  and  demanded  the 
balance  of  it.  But  I  am  now  convinced  that  he  is  not  bound  by  that  pay- 
ment, it  having  been  made  by  mistake.  The  only  payment  by  which  a 
party  is  bound,  is  that  which  is  made  into  court  under  a  rule  of  court;  that 
is  a  payment  on  record  ;  and  the  party  can  never  recover  it  back  again, 
though  it  afterwards  appear  that  he  paid  it  wrongfully ;  but  that  does  not 
extend  to  payments  between  party  and  party. 

Grose,  J.,  of  the  same  opinion.  Hule  discharged. 


IRVING   V.   RICHAEDSOX. 

In  the  King's  Be.nch,  April  22,  1831. 

[Reported  in  2  Bat-newall  ^  Adolphus,  193.] 

Assumpsit  for  money  had  and  received  ;  plea,  the  general  issue.  At  the 
trial  before  Lord  Te.vterden,  C,  J.,  at  the  sittings  in  London  after  last 
Hilary  term,  the  circumstances  appeared  to  be  as  follows:  —  The  defend- 
ant, Richardson,  effected  a  policy  of  insurance  for  2000/.,  on  the  ship  Swift- 
sure  valued  at  3000/.,  with  the  Alliance  Marine  Insurance  Company,  ou 
behalf  of  which  this  action  was  brought  by  the  plaintiff,  as  chairman, 
pursuant  to  act  of  parliament.  The  defendant  had  previously  insured  the 
same  vessel,  valued  at  the  same  amount,  with  another  company  for  1700/. 
The  ship  was  lost,  and  he  received  the  amount  of  the  insurances  from  both 
companies,  the  Alliance  not  being  then  aware  of  the  first  insurance.  It 
also  appeared  that  the  defendant  was  interested  in  the  Swiftsure  as  mort- 
gagee for  the  sum  of  900/.,  and  no  otherwise.  This  action  was  brought 
by  the  Alliance  Company  to  recover  their  proportion  of  700/.,  the  excess  of 
the  sum  received  by  the  defendant  on  the  two  policies  above  3000/.,  which 
they  alleged  to  be  an  over  payment.  On  behalf  of  the  dofond.uit,  evidenco 
was  given  that  the  full  value  of  the  vessel  exceeded  the  amount  insured, 
and  it  was  contended,  that  the  mortgagee  was  therefore  entitled  to  retain 
that  amount,  though  above  the  valuation   in  either  policy,  to  which  point 

19 


290  IRVING  V.   RICHARDSON.  [CIIAP.  II. 

B'jusfield  V.  Barnes  ^  was  cited.  Lord  Texterdex,  C.  J.,  thought  that  case 
not  applicable  to  the  present ;  there  the  assured  sought  to  recover  600/.  on 
a  policy  upon  a  ship  valued  at  6000/.,  and  it  was  objected  that  he  had  al- 
ready received  6000/.,  on  a  policy  effected  with  another  office  on  the  same 
ship  valued  at  8000/. ;  and  it  being  proved  that  she  was  really  worth 
8000/.,  Lord  Ellenborough  held,  that  he  might  recover  the  600/. ;  but 
liere  the  value  stated  in  both  policies  was  the  same,  viz.,  3000/.,  and  the 
defendant  claimed  to  receive,  in  the  whole,  3700/.  Lord  Tenterden,  how- 
ever, left  it  to  the  jury  to  say  whether  the  insurance  effected  by  the  de- 
fendant was  intended  to  cover  the  defendant's  own  interest  only  as 
mortgagee,  or  that  of  the  mortgagor  also.  In  the  latter  case,  if  Bousfield 
V.  Barnes  was  applicable,  the  defendant  would  have  been  entitled  to  a  ver- 
dict, as  the  sum  received  by  him  would  not  have  exceeded  the  actual  value 
of  the  interest  protected  by  the  two  policies.  The  jury  thought  (and  there 
was  some  evidence  to  wairant  the  conclusion)  that  the  defendant  only 
meant  to  insure  his  own  interest  as  mortgagee ;  and  on  that  ground  they 
gave  a  verdict  for  the  plaintiff  for  286/. 

Campbell  for  the  defendant. 

Lord  Tenterden,  C.  J.,  having  read  over  the  evidence  given  at  the  trial, 

Littledale,  J.  I  am  of  opinion  that  this  case  was  properly  left  to  the 
jury.  Before  the  late  registry  act  ^  the  mortgagee  of  a  ship  was,  in  point 
of  law,  the  owner,  and  might  insure  to  the  full  extent  of  the  ship's  value 
to  the  mortgagor  as  well  as  to  himself  But  by  the  statute  the  interests  of 
mortgagor  and  mortgagee  are  more  distinctly  severed  tliau  they  formeily 
were.  The  mortgagor,  now,  does  not  cease  to  be  an  owner.  In  order, 
therefore,  that  the  defendant  in  this  case  might  not  keep  possession  of  a 
sum  exceeding  not  only  the  value  stated  in  the  policies,  but  also  the 
amount  of  his  interest,  it  became  necessary  to  ascertain  what  it  was  that 
he  had  in  reality  insured ;  and  with  this  view  it  was  rightly  put  to  the 
jury  whether,  in  effecting  the  policies,  he  intended  to  insure  the  whole  in- 
terest in  the  vessel,  or  merely  the  amount  of  his  own  as  mortgagor. 

Parke,  J.  I  am  of  the  same  opinion.  The  mortgagee  of  a  ship,  at 
least  since  the  statute,  has  a  distinct  interest  from  that  of  the  mortgagor, 
to  the  extent,  prima  facie,  of  the  value  mortgaged.  The  case,  therefore, 
was  rightly  left  to  the  jury. 

Patteso.v,  J.  The  defendant,  if  he  had  been  suing  on  one  of  these  poli- 
cies in  respect  of  his  interest  as  mortgagee,  must  have  averred  that  he  was 
interested  to  the  amount  insured  ;  and  could  not  have  recovered  the  sum 
here  in  dispute,  if  it  had  been  an  excess  above  the  value  mortgaged.  It 
was,  therefore,  a  proper  question  for  the  jury  in  this  case  whether  he  in- 
tended to  insure  that  amount  only,  or  the  value  of  the  ship  to  both  the 
parties  interested. 

Lord  Tenterden,  C.  J.,  concurred.  Rule  refused. 

1  4  Campb.  228.  «  6  Geo.   3,  c.   110,  §  45.  —  Ed. 


SECT.  I.]  TOWNSEND   V.   CROWDY.  291 

TOWNSEND   V.   A.  S.   CROWDY. 

In  the  Common  Pleas,  June  11,  1860. 

[Reported  in  8  Common  Bench  Reports,  New  Series,  477.] 

This  was  an  action  for  money  had  and  received  to  the  plaintiff's  use. 
The  defendant  pleaded  never  indebted. 

By  consent,  the  following  case  was  stated  for  the  opinion  of  the  court :  — 
In  the  year  1851,  the  defendant  and  the  defendant's  brother  (William 
Morse  Crowdy),  who  had  for  many  years  previously  been  in  practice  in 
partnership  as  solicitors  at  Swindon,  in  the  county  of  Wilts,  took  the  plain- 
tiff into  their  firm  ;  the  defendant  having  one-half  share  in  the  business, 
and  the  plaintiff  and  the  defendant's  brother  having  respectively  one-fourth 
share.  In  the  year  1855,  it  was  agreed  that  the  defendant  should  retire 
as  from  the  31st  of  December,  1854;  and  on  the  14th  of  March,  1855,  the 
partnership  was  dissolved  by  deed  accordingly,  and  a  new  one  was  formed 
between  the  plaintiff,  the  defendant's  brother  William  Morse  Crowdy,  and 
William  Ormond.  It  was  recited  in  the  said  deed  (inter  alia)  that  the 
defendant  had  sold  one  moiety  of  his  share  in  the  said  business  to  the  plain- 
tiff for  the  sum  of  £300,  payable  by  six  half-yearly  instalments  of  £50 
each,  on  the  30th  of  June  and  the  31st  of  December  in  each  of  three  years 
after  the  31st  of  December,  1854,  and  the  further  sum  of  £450,  payable  at 
the  end  of  six  calendar  months  next  after  the  expiration  of  the  said  period 
of  three  years,  with  interest  at  £5  per  cent  from  the  expiration  of  the  said 
period  of  three  years;  but  that  the  last-mentioned  sum  was  to  be  subject  to 
a  deduction  therefrom  of  the  amount  (if  any)  by  which  the  total  net  profits 
to  accrue  during  the  same  period  from  the  two-fourth  parts  of  the  said  busi- 
ness to  which  the  plaintiff  would  be  entitled  during  such  period  should  fall 
short  of  £1800,  which  would  be  the  amount  of  such  net  profits  during  the 
said  period  of  three  years,  if  they  continued  at  their  then  estimated  average 
of  £600  per  annum  ;  and  that  the  payment  of  the  said  sums  should  be  secured 
by  the  covenant  of  the  plaintiff.  The  deed  then  contained  the  following 
covenant  by  the  plaintiff  with  the  defendant:  — 

"In  pursuance  of  the  said  agreement  in  this  respect,  and  in  consideration, 
of  the  sale  and  relinquishment  by  the  said  Alfred  Southby  Orowdy  to  the 
said  James  Copleston  Townsend  of  his  one-fourth  share  and  interest  in  the 
said  copartnership  business,  and  of  the  covenants  of  the  said  Alfred  Southby 
Crowdy  hereinafter  contained,  and  of  all  and  singular  the  premi.ses,  he  the 
said  James  Copleston  Townsend,  for  himself,  his  lieirs,  executors,  adminis- 
trators, and  assigns,  doth  liereby  covenant  with  the  said  A.  S.  ("rowdy,  his 
executors,  etc.,  in  manner  following,  that  is  to  say,  that  he  the  said  J,  C. 


292  TOWNSEND   V.    CEOWDY.  [CIIAP.  II. 

Townseiid,  his  heirs,  etc.,  shall  and  will  pay  to  the  said  A.  S.  Crowdy,  his 
executors,  etc.,  the  sum  of  £300  by  instalments,  namely,  the  sum  of  £50 
on  the  30th  of  June,  1855,  the  further  sum  of  £50  on  the  31st  of  Decem- 
ber, 1855,  the  further  sum  of  £50  on  the  30th  of  June,  185G,  the  further 
sum  of  £50  on  the  31st  of  December,  1856,  the  further  sum  of  £50  on  the 
30th  of  June,  1857,  and  the  further  sum  of  £50  on  the  31st  of  December, 

1857,  and,  in  case  all  or  any  or  either  of  the  said  several  sums  shall  not 
be  paid  on  the  several  days  on  which  the  same  are  respectively  hereby  made 
payable  as  aforesaid,  shall  and  will  pay  to  the  said  A.  S.  Crowdy,  his  execu- 
tors, etc.,  interest  for  such  sums  or  sum,  or  any  part  thereof,  so  having 
become  due  and  remaining  unpaid,  after  the  rate  of  £5  for  every  £100  by 
the  year,  to  be  computed  from  the  day  or  respective  days  on  which  such 
sum  or  sums  so  in  arrear  is  or  are  hereby  made  payable  up  to  the  day  on 
which  the  same  shall  be  paid;  And  also  shall  and  will,  on  the  30th  of  June, 

1858,  pay  to  the  said  A.  S.  Crowdy,  his  executors,  etc.,  the  further  sum  of 
£4:50,  with  interest  thereon  at  the  rate  aforesaid,  to  be  computed  from  the 
31st  of  December,  1857  :  Provided  nevertheless,  and  it  is  hereby  agi-eed 
and  declared  between  and  by  the  said  A.  S.  Crowdy  and  J.  C.  Townsend, 
that  if  one  moiety  of  the  whole  of  the  net  profits  of  the  said  partnership 
business  of  Crowdy,  Townsend  &  Ormond  for  the  period  of  three  years 
from  the  1st  of  January,  1855,  to  the  31st  of  December,  1857,  shall  not 
amount  in  the  whole  to  the  sum  of  £1800,  then  and  in  such  case  the  said 
J.  C.  Townsend,  his  heirs,  etc.,  shall  be  entitled  to  deduct  from  the  said 
sum  of  £450  hereinbefore  covenanted  to  be  paid  by  him  on  the  30th  of 
June,  1858,  such  a  sum  as  shall  be  equal  to  the  difference  between  £1800 
and  the  actual  amount  of  one  moiety  of  the  whole  of  such  net  profits  as 
aforesaid  for  the  said  period  of  three  years,  and  the  balance  only  of  the  said 
sum  of  £450  after  such  deduction  as  aforesaid  shall  be  payable  by  the  said 
J.  C.  Townsend  on  the  said  30th  of  June,  1853,  with  interest  for  such  bal- 
ance after  the  rate  of  £5  per  cent  per  annum  from  the  said  31st  of  Decem- 
ber, 1857,  in  lieu  of  the  full  sum  of  £450  and  interest  for  the  same;  and 
if  the  said  difference  between  the  sum  of  £1800  and  the  actual  amount  of 
one  moiety  of  the  whole  of  such  net  profits  as  aforesaid  for  the  period  of 
three  years  shall  amount  to  or  exceed  the  sum  of  £450,  then  and  in  such 
case  no  part  of  the  said  sum  of  £450  hereinbefore  covenanted  to  be  paid 
by  the  said  J.  C.  Townsend,  his  heirs,  etc.,  on  the  30th  of  June,  1853,  shall 
be  payable." 

And  after  some  other  covenants  not  affecting  the  question,  the  parties 
mutually  covenanted  (^uifer  alia)  as  follows  :  — 

"And  further,  that  up  to  and  on  the  31st  of  December,  1858,  the  said 
A.  S.  Crowdy,  his  executors,  etc.,  or  any  person  or  persons  on  his  and  their 
behalf,  not  being  a  solicitor  or  attorney  practising  within  twenty  miles  of 
Swindon,  shall  be  entitled  at  all  reasonable  hours  of  the  day  to  have  access 
to  all  or  any  of  the  books  of  account  and  other  books  and  documents  of  or 


SECT.  L]  TOWNSEND   V.   CROWDY.  293 

in  any  wise  relating  to  the  business  of  tlie  said  late  firm  of  Crowdys  & 
Towusend,  and  the  firm  of  Crowdy,  Townsend  &  Ormond,  or  either  of  them, 
and  to  examine  and  make  copies  of  or  extracts  from  the  same  or  any  of 
them ;  and  also  to  have  the  said  books  and  documents,  or  any  of  them, 
produced  and  shown  forth  at  such  time  or  times  and  j>lace  or  places,  and  to 
such  extent,  as  may  be  reasonably  required  for  the  settlement  of  any  ques- 
tion arising  out  of  or  relating  to  any  matter  or  thing  herein  contained  : 
but,  nevertheless,  the  said  A.  S.  Crowdy,  his  executoi-s,  etc.,  in  exercising 
any  such  rights,  shall  interfere  as  little  as  may  be  with  the  user  of  such 
books  and  documents  in  the  business  of  the  firm  of  Crowdy,  Towusend  & 
Ormond." 

The  half-yearly  instalments  of  <£50  each  were  duly  paid ;  and,  on  the 
30th  of  June,  1858,  without  any  previous  application  or  communicatiou 
from  the  defendant,  the  plaintiff  paid  £460  I8s.  Gd.  to  the  defendant  through 
the  bankers,  such  sum  being  the  remaining  sum  of  £450  with  the  half-year's 
interest  due  thereon.  On  the  day  before,  viz.,  on  the  29th  of  June,  being 
the  day  on  which  the  plaintiff  remitted  the  £4G0  18s.  GJ.  from  the  coun- 
try, he  wrote  to  his  agent  in  Loudon,  who  is  the  defendant's  nephew,  as 
follows  :  — 

Swindon,  29tli  of  Juno,  1858. 

Dear  Sin,  —  I  have  this  day  paid  into  your  uncle's  account,  through 
Eobarts  &  Co.,  the  sum  of  £4G0  18s.  6d.,  being  the  balance  due  for  th© 
purchase  of  his  share  of  the  partnership,  with  interest  thereon  (less  income- 
tax)  to  30th  inst.  I  believe  the  deed  of  dissolution  of  partnership  under 
which  the  moneys  were  payable  was  deposited  with  you  in  London,  as  well 
as  the  new  deed  of  partnership ;  and,  if  so,  I  shall  be  obliged  by  your  pro- 
curing a  receipt  to  be  endorsed  on  the  deed  for  all  moneys  due  from  me, 
and  signed  by  your  uncle. 

J.  CoPLESTON  Townsend. 
J  AS.  Crowdy,  Esq. 

And  on  Mr.  James  Crowdy  having  replied  that  the  deed  had  not  been 
deposited  with  him,  the  plaintiff  wrote  to  him  again  as  follows  :  — 

Swindon,  8th  of  July,  1858. 
Dear  Sir, — There  was  a  deed  of  even  date  with  our  present  deed  of 
partnership,  betwixt  Mr.  W.  M.  Crowdy,  'Mr.  A.  S.  Crowdy,  and  myself, 
under  which  it  was  covenanted  by  me  to  i)ay  Mr.  A.  S.  Crowdy  £750  by 
instalments  as  therein  mentioned,  with  interest  on  the  last  instalment, 
£450,  from  Ist  of  January  to  30th  of  June,  the  time  when  it  became  duo. 
This  principal  and  interest  I  have  paid  ;  and,  as  I  fancied  you  had  this 
deed,  as  well  as  the  partnership,  I  wrote  to  you  on  the  subject.  As  it  ap- 
pears it  is  not  in  your  hands,  it  may  be  in  Mr.  A.  S.  Crowdy's,  or  at  any 
rate  he  well  knows  who  has  it ;  and  perhaps  you  will  bo  good  enough  to 
ascertain  where  it  is,  and  suggest  that  the  deed  be  either  given  up  to  me, 


294  TOWNSEND   V.    CROWD Y.  [CIIAP.  II. 

the  money  due  thereunder  having  been  all  paid,  or  that  a  receipt  be  endorsed 
thereon,  and  the  deeds  left  in  your  custody  ;  as  I  should  wish,  that,  in  the 
event  of  the  decease  either  of  myself  or  Mr.  A.  S.  Crowdy,  some  evidence 
of  payment  should  be  extant. 

J.  COPLESTON'    ToWNSEND. 

James  Ckowdy,  Esq. 

This  letter  Mr.  James  Crowdy  forwarded  to  the  defendant,  inquiring  what 
answer  he  should  give  to  it ;  whereupon  the  defendant  saw  Mr.  Matthews, 
the  gentleman  who  held  the  deed  between  the  parties,  and  asked  him  to 
look  it  out,  that  he  might  endorse  on  it  a  receipt,  which  he  prepared  as 
follows :  — 

1st  of  July,  1858,  I  acknowledge  that  I  have  received  of  Mr.  J. 
Townsend  the  within-mentioned  sum  of  £750  by  instalments  as  within 
provided,  and  also  all  interest  due  to  me  thereon. 

Alfred  S.  Crowdy. 

Mr.  Matthews  was  going  to  London  when  the  defendant  spoke  to  him ; 
but  he  promised  to  look  out  the  deed  on  his  return.  The  defendant  then 
wrote  to  his  nephew,  who  replied  to  the  plaintiff  as  follows,  enclosing  a  copy 
of  the  proposed  receipt,  as  above  :  — 

London,  June  14tli,  1858. 

Dear  Sir,  —  I  find  by  a  letter  received  to-day  from  Mr.  A.  S.  Crowdy,  in 
reply  to  mine  forwarding  him  yours  of  the  8th  inst.,  that  the  deed  under 
which  the  £750  was  payable  by  you  is  in  the  hands  of  Mr.  John  Matthews, 
who  is  now  from  home ;  but  so  soon  as  he  returns  Mr.  A.  S.  Crowdy  will 
endorse  upon  it  a  receipt  in  the  form  enclosed. 

Mr.  A.  S.  Crowdy  asks  me  in  the  same  letter  to  inquire  as  to  debts  due 
to  the  old  firm,  for  the  collection  of  which  he  believes  that  the  above- 
mentioned  deed  provides.     He  would  be  glad  to  have  in  due  course  an 

account  of  how  far  these  are  collected. 

James  Crowdy. 
J.  C.  Townsend,  Esq. 

To  this  letter,  the  plaintiff  replied  as  follows :  — 

Swindon,  15th  July,  1858. 

Dear  Sir,  —  I  shall  be  quite  satisfied  with  the  proposed  receipt  when 

endorsed  on  the  deed  of  dissolution.    With  reference  to  the  debts  due  to  the 

old  firm,  I  have  from  time  to  time  given  Mr.  W.  M.  Crowdy  an  account  of 

all  moneys  received  and  paid  by  me  on  behalf  of  the  firm  up  to  the  present 

time ;  and  I  understand  he  is  preparing  a  similar  account. 

Jas.  C.  Townsend. 
.  James  Crowdy,  Esq. 


SECT.  I.]  TOWNSEND   V.   CROWDY.  295 

Withiu  a  few  days  afterwards,  Mr.  Matthews  returned  home,  and  produced 
the  deed,  when  the  defeudant  endorsed  on  it  and  signed  the  receipt  in  the 
form  above  stated  accordingly. 

The  defendant  placed  tlie  £4G0  18s.  6c/.  to  his  general  account  with  his 
bankers;  and  in  September,  T858,  he  purchased  land,  for  the  payment  of 
Avhich  he  drew  £425  from  the  bank.  At  that  time  the  defendant  had  about 
£300  standing  to  his  credit,  in  addition  to  the  £4G0  18«.  6d. 

Down  to  the  time  when  the  defendant  retired  from  the  partnership,  ac- 
counts were  kept  in  the  following  manner:  —  Each  partner  kept  a  separate 
day-book,  containing  the  receipts  and  payments  by  each  partner;  and  these 
books  were  from  time  to  time  posted  by  a  clerk  into  one  joint  cash-book  ;  and, 
at  the  end  of  every  year,  a  cash-balance  was  struck  between  the  partners. 
'*  Bill  Journals  "  were  also  kept,  from  which  bills  were  made  out  to  clients, 
and  posted  in  a  joint  ledger.  In  1855,  after  the  defendant  retired,  a  differ- 
ent system  of  book-keeping  in  some  respects  was  adopted  by  the  plaintiff 
and  Ormond  ;  but  William  Morse  Crowdy  (who  was  not  in  good  health,  and 
by  the  terms  of  the  partnership-deed  of  the  Uth  of  March,  1855,  was  at 
liberty  to  absent  himself  from  the  office  when  he  thought  fit,  and  was  not 
obliged  to  devote  more  time  to  his  profession  than  he  pleased),  did  not  join 
in  these  accounts,  but  continued  to  keep  his  own  accounts  in  his  accustomed 
mode,  and  within  about  six  weeks  of  the  end  of  every  half-year,  and  some- 
times oftener,  sent  an  account  on  sheets  of  paper  to  his  copartners  of  the 
receipts  and  payments  by  him,  and  of  the  state  of  clients'  accounts.  These 
accounts  sometimes  required  further  explanations  and  additions  and  correc- 
tions by  William  Morse  Crowdy.  An  account  of  the  above  description  was 
supplied  by  him  before  the  end  of  1857  to  his  copartners,  made  up  to  the 
end  of  October,  1857;  and,  in  February,  1858,  he  delivered  to  Ormond  a 
similar  account  to  the  Slst  of  December,  1857.  In  June,  1858,  the  plain- 
tiff personally  investigated  the  partnership  accounts,  for  the  purpose  of 
ascertaining  the  amount  of  the  profits  in  the  three  years  preceding  the  Slst 
of  December,  1857,  having  before  him  (inte?-  alia)  the  accounts  rendered 
by  William  Morse  Crowdy  to  the  end  of  October,  1857,  but  not  the  account 
of  that  partner  to  the  Slst  of  December,  1857,  which  was  then  in  the 
possession  of  Ormond,  who  was  absent  from  home  from  May  to  July,  1858. 

The  plaintiff  made  an  estimate  of  the  business  done  by  William  Morse 
Crowdy  in  November  and  December,  1857,  which  estimate  turned  out  to 
be  substantially  correct.  The  result  of  this  investigation  and  calculation 
as  then  made  by  the  plaintiff  (which  occupied  parts  of  several  days,  and 
was  reduced  into  written  figures)  showed  that  a  moiety  of  the  net  profits  of 
the  partnership  business  for  the  three  years  from  the  Ist  of  January,  1855, 
to  the  Slst  of  December,  1857,  exceeded  £1800;  and,  upon  that  calcidatiou 
80  made,  and  under  tlie  impression  and  belief  that  the  said  moiety  of  the 
profits  amounted  to  £1800,  the  £4G0  18s.  Gd.  was  i)aid  to  the  defendant  as 
already  mentioned.     Additional  particidars  and  explanations  and  receij)t8 


296  TOWNSEND   V.   CROWDY,  [CHAP.  II. 

and  payments  by  William  Morse  Crowdy  during  some  parts  of  the  three 
years  were  supplied  by  him  to  his  copartners  after  June,  1858;  so  that,  at 
the  period  of  the  payment  of  the  .£460  18s.  Qid.,  as  between  William  Morse 
Crowdy  and  the  plaintiff  and  Ormond,  the  partnership  accounts  were  not 
in  fact,  and  were  not  treated  by  the  partners  as,  finally  settled  to  the  31st 
of  December,  1857.  The  additional  particulars,  however,  did  not  reduce 
the  amount  of  net  profits.  Nevertheless,  the  mode  of  keeping  the  accounts 
made  it  difficult  to  ascertain  with  precise  accuracy  the  profits  to  any  given 
period. 

Between  October  and  December,  1858,  the  plaintiff,  in  consequence  of  a 
statement  by  his  partner  Ormond,  made  a  fresh  investigation  and  calculation 
of  the  partnership  accounts  for  the  three  j'ears  ending  the  31st  of  December, 
1857;  and,  according  to  the  calculation  then  made  by  the  plaintiff,  a  moiety 
of  the  net  profits  of  the  partnership  business  for  the  period  aforesaid 
amounted  to  a  sum  less  than  £1800. 

In  October,  1858,  the  plaintiff's  partner,  Mr.  Ormond,  intimated  verbally 
to  the  defendant,  that  the  total  net  profits  of  the  partnership  were  under 
£1200  a  year;  but  no  commimication  was  made  by  the  plaintiff  to  the 
defendant  until  March,  1859,  when  the  plaintiff's  attorney  addressed  to  the 
defendant  a  letter  applying  for  payment  of  .£288  19s.  3(/.,  the  difference 
between  £1800  and  £1511  O.s.  9(/.,  the  sum  at  which  the  plaintiff,  as  last 
above-mentioned,  calculated  the  amount  of  a  moiety  of  net  profits  for  the 
three  years. 

The  defendant  does  not  admit  that  one  moiety  of  the  whole  net  profits 
of  such  business  during  the  said  three  years  fell  short  of  £1800  by  the  sum 
of  £288  19s.  M. 

The  question  for  the  opinion  of  the  court,  was,  —  whether  the  plaintiff, 
having  paid  the  sum  of  £450  to  the  defendant  on  the  30th  of  June,  1858, 
in  the  manner  and  under  the  circumstances  above  stated,  is  now  entitled  to 
recover  from  the  defendant  the  sum,  if  any,  which  he  might  have  claimed 
to  deduct  from  such  payment  at  that  date. 

If  the  court  should  be  of  opinion  that  he  is,  then  judgment  is  to  be 
entered  for  the  plaintiff,  with  costs,  including  the  costs  of  and  incident  to 
this  case,  for  such  sum  as  may  be  found  due  to  him  upon  investigation  of 
the  accounts,  as  provided  for  by  the  judge's  order. 

If  the  court  should  be  of  a  contrary  opinion,  or  if,  upon  such  investiga- 
tion of  the  accounts,  no  sum  shall  be  found  due  to  the  plaintiff,  then  judg- 
ment is  to  be  entered  for  the  defendant,  with  costs,  including  the  costs  of 
and  incident  to  this  case. 

Montagu  Chmnhers,  Q.  C.  and  Macnamara  for  the  plaintiff. 

Manisty,  Q.  C.  for  the  defendant. 

Erle,  C.  J.  I  am  of  opinion  that  our  judgment  in  this  case  should  be 
for  the  plaintiff.  He  paid  £450  upon  the  faith  of  the  moiety  of  the  profits 
of  the  partnership  business  for  the  three  years  ending  on  the  31st  of  Decern- 


SECT.  I.]  TOWNSEND   V.   CKOWDY.  297 

Ler,  1857,  having  amouuted  to  £1800.  The  £450  was  to  become  due  only 
upon  that  state  of  facts;  and  the  plaintiff  in  June,  1858,  paid  it  in  the 
belief  that  that  state  of  facts  did  exist.  After  he  had  so  paid  the  money, 
viz.,  between  October  and  December  of  that  year,  upon  going  more  minutely 
into  the  accounts,  he  discovered  his  mistake:  and  in  March,  1859,  he  de- 
manded back  the  sum  which  he  conceived  he  had  paid  in  excess.  I  think 
the  plaintiff  never  intended  when  he  made  the  payment  in  question  to 
abandon  his  right  of  investigating  tlie  accounts.  If  he  had  done  so,  then, 
according  to  the  cases,  he  could  not  be  allowed  to  retrace  his  steps.  But 
here  the  plaintiff  only  paid  the  money  because  he  believed  the  fact  to  exist 
■which  would  entitle  the  defendant  to  receive  it.  It  seems,  from  a  long 
series  of  cases,  from  Kell}-  v.  Solari,^  down  to  Dails  v.  Lloyd,^  that,  where 
a  party  pays  money  under  a  mistake  of  fact,  he  is  entitled  to  recover  it 
back,  although  he  may  at  the  time  of  the  payment  have  had  means  of 
knowledge  of  which  he  has  neglected  to  avail  himself.  If  there  had  been 
any  stipulation  that  the  amount  of  profits  should  be  settled  and  ascertained 
by  a  given  time,  I  should  have  been  of  opinion  that  it  was  not  competent 
to  the  plaintiff  afterwards  to  reopen  the  accounts,  and  demand  back  the 
money  he  had  paid.  But  I  do  not  find  any  such  provision  in  the  deed. 
Liberty  is  reserved  to  the  plaintiff  to  examine  the  books :  but  I  do  not  think 
the  omission  to  exercise  that  right  within  any  given  time  authorizes  the 
defendant  to  retain  this  money.  The  fact  of  the  claim  being  brought  for- 
ward at  a  late  period  may  seem  to  cast  some  slight  suspicion  on  it;  and,  if 
there  were  any  reason  to  suppose  that  the  plaintift'  had  Iain  by  and  omitted 
to  investigate  the  accounts  until  the  complication  of  matters  had  operated 
injuriously  upon  the  defendant's  position,  the  case  might  have  fallen  within 
some  of  the  authorities  which  have  been  referred  to  by  Mr.  Manisty.  But 
no  such  thing  is  suggested  here. 

Williams,  J.  I  am  entiiely  of  the  same  opinion.  No  doubt,  at  one 
time  the  rule  that  money  paid  under  a  mistake  of  fact  might  be  recovered 
back,  was  subject  to  the  limitation  that  it  must  be  shown  that  the  party 
seeking  to  recover  it  back  had  been  guilty  of  no  laches.  But,  since  the 
case  of  Kelly  v.  Solari,*  it  has  lieen  established  that  it  is  not  enough  that 
the  party  had  the  means  of  learning  the  truth  if  he  had  chosen  to  make 
inquiry.  The  only  limitation  now  is,  that  he  must  not  waive  all  inquiry. 
Upon  the  facts  of  this  case,  I  think  the  plaintifl'  is  entitled  to  recover. 

WiLLKS,  J.  I  am  of  the  same  opinion.  This  is  the  simj)le  ca.se  of  one 
paying  another  money  which  both  at  the  time  suppose  to  be  due,  but  which 
afterwards  turns  out,  in  consequence  of  a  mistake  of  fact  on  the  part  of  the 
payer,  not  to  have  been  really  due.  In  such  a  case  the  law  clearly  is  that 
the  money  may  be  recovered  back.  The  only  distinction  is  between  error 
or  mistake  of  law,  for  which  the  payer  is  responsil)le,  and  error  or  mistake 
of  fact,  for  which  he  is  not. 

1  9  M.  &  W.  54.  »  12  Q.  B.  531  (E.  C.  L.  K.  vol.  CI). 


298  WHEADON   V.    OLDS.  [CHAP.  II. 

Eyles,  J.  I  am  of  the  same  opinion.  Kelly  v.  Solari  was  distinctly 
recognized  in  Bell  v.  Gardiner,  in  this  court,  and  by  Dails  v.  Lloyd,  in  the 
Court  of  Queen's  Bench,  to  this  extent,  that  you  may  always  rip  up  accounts 
which  have  been  settled  between  parties  who  have  acted  under  mistake  or 
misapprehension  of  the  facts.  I  think  these  cases  are  based  upon  a  perfectly 
sound  principle.  Suppose  an  executor  whose  testator's  name  was  John  Smith 
had  a  promissory  note  signed  "John  Smith"  presented  to  him  for  payment, 
and  he,  mistakenly  supposing  it  to  be  the  note  of  his  testator,  paid  it,  would 
he  not  be  entitled  to  recover  back  the  money  ?  ^  Here,  the  money  was  paid 
by  the  plaintiff  under  a  mistake,  both  parties  being  under  an  impression 
that  it  was  due.  That  being  so,  it  was  manifestly  against  conscience  that 
the  defendant  should  retain  it.  The  law  very  properly  casts  upon  the 
person  who  makes  the  payment  the  burthen  of  showing  tliat  it  was  made 
under  a  mistake.  That  being  proved,  it  would  be  inequitable  not  to  permit 
him  to  recover  it  back.  All  the  three  courts  have  held  that  the  right  to 
recover  hack  money  so  paid  is  not  fettered  by  the  condition  suggested,  that 
there  shall  not  only  be  absence  of  knowledge,  but  also  absence  of  the  means 
of  knowledge  of  the  facts.  I  have  nothing  to  add  as  to  the  particular 
circumstances  of  this  case,  except  that  it  appears  to  me  to  be  eminently 
a  case  for  the  application  of  the  principle  now  so  well  established  in 
Westminster  Hall.  Judgment  for  the  plaintiff. 


WHEADON  V.   OLDS. 
In  the  Supreme  Court  of  Judicature  op  New  York,  October,  1838. 

[Reported  in  20  Wendell,  174.] 

This  was  an  action  of  assumpsit,  tried  at  the  Onondaga  circuit  in 
March,  1836,  before  the  Hon.  Daniel  Moseley,  one  of  the  circuit  judges. 

The  defendant  agreed  to  sell  to  the  plaintiff  from  1600  to  2000  bushels 
of  oats,  at  forty-nine  cents  per  bushel.  The  delivery  of  the  oats  was  com- 
menced by  removing  them  from  a  storehouse  to  a  canal  boat ;  tallies  were 
kept,  and  when  the  tallies  amounted  to  500,  it  was  proposed  to  guess  at 
the  remainder ;  and  after  a  while  it  was  agreed  between  the  parties  to  call 
the  whole  quantity  1900  bushels,  and  the  plaintiff  accordingly  paid  for  that 
quantity  at  the  stipulated  price.  When  the  oats  came  to  be  measured  it 
was  ascertained  that  there  were  only  1488  bushels  delivered.  It  was  then 
found  that  the  mistake  had  happened  by  both  parties  assuming  as  the  basis 
of  the  negotiation  fixing  the  quantity  of  1900  bushels,  that  500  bushels  had 
been  loaded  in  the  boat  at  the  time  when  they  undertook  to  guess  at  the 
residue,  whereas  in  fact  only  250  bushels  had  been  loaded,  —  the  tallies 

1  See  Walter  v.  James,  L.  R.  6  Ex.  124,  127  ;  Tybout  v.  Thompson,  2  P.  A.  Bio.  27. 
—  Ed. 


SECT.  I.]  WHEADON   V.    OLDS.  299 

representing  half  bushels  and  not  bushels,  and  that  the  parties  supposed 
that  the  quantity  loaded  was  not  a  quarter  of  the  whole  quantity.  The 
vendor  refusing  to  refund  a  portion  of  the  money  received  by  him,  this 
action  was  brought  by  the  purchaser,  who  declared  for  money  had  and  re- 
ceived, and  delivered  a  bill  of  particulars  stating  the  contract  between  the 
parties,  that  the  oats  were  delivered,  and  "that  in  measuring  said  oats  a 
mistake  was  made,  whereby  the  plaintiff  paid  the  defendant  for  about  300 
bushels  more  oats  than  he  received."  Tlie  defendant  proved  by  one  wit- 
ness that  the  plaintiff  said  that  he  would  take  the  oats  at  1900  bushels  hit 
or  miss,  and  by  another  that  he  had  acknowledged  that  he  took  the  oats  at 
that  quantity  at  his  own  risk.  He  further  proved  that  before  the  boat  left 
the  storehouse,  on  dissatisfaction  being  expressed  by  a  friend  of  the  plaintiff 
who  was  to  advance  the  money  for  him,  as  to  the  mode  of  ascertaining  the 
quantity,  that  he  told  them  that  if  they  were  dissatisfied  with  the  quantity, 
to  put  the  oats  back  into  the  storehouse,  and  pay  him  for  his  trouble. 
When  the  evidence  was  closed  the  counsel  for  the  defendant  stated  tliat  he 
should  not  question  the  fact  that  the  parties  were  mutuall}'  in  error  in  sup- 
posing that  500  bushels  of  oats  had  been  put  on  board,  when  in  fact  only 
250  bushels  had  been  put  on  board  at  the  time  of  the  bargain  in  reference 
to  the  quantity,  but  insisted  that  the  bargain  was  obligatory  upon  the 
plaintiff,  and  that  therefore  he  was  not  entitled  to  recover.  He  also  in- 
sisted that  the  proof  varied  from  the  bill  of  particulars  ;  and  thirdly,  that 
at  all  events  the  plaintiff  was  only  entitled  to  recover  for  the  deficiency  of 
250  bushels  in  the  first  estimated  quantity.  The  judge  charged  the  jury 
that  if  they  should  find  that  the  parties  at  the  time  of  the  bargain  in  refer- 
ence to  the  1900  bushels  were  in  error  as  to  the  quantity  measured,  and 
supposed  that  500  bushels  had  been  measured  when  in  fact  the  quantity 
measured  was  only  250  bushels,  and  had  based  the  bargain  upon  that  sup- 
position, then  that  the  plaintiff  was  entitled  to  recover  for  the  deficiency  of 
the  1900  bushels.  The  jury  found  a  verdict  for  the  plaintiff  for  $190.  Tlie 
defendant  moves  for  a  new  trial. 

S.  Stevens  for  the  defendant. 

J.  L.  Wendell  for  the  plaintiff. 

By  the  Court,  Cowen,  J.  The  objection  of  variance  from  the  bill  of  par- 
ticulars was  too  general.  It  should  have  been  stated  whether  it  was  in 
quantity,  or  sum,  or  in  what  else. 

The  mistake  as  proved  went  not  only  to  the  quantity  measured,  but  the 
jury  found,  under  the  charge  of  the  judge,  that  relativi'ly  it  influenced  the 
entire  agreement  to  take  the  oats  at  1900  bushels.  One  ingredient  of  es- 
timating the  residue,  as  talked  of,  was  the  as.'iuming  that  the  supjwsed  500 
bushels  was  one-fourth  of  the  pile,  which  would  operate  unfavoralily  to  the 
plaintiff,  if  he  reasoned  from  the  size  of  the  smaller  to  that  of  the  larger 
pile.  Here  was  an  admitted  error,  which  certainly  influenced  the  conduct 
of  the  plaintiff  to  the  extent  of  250  bushels ;  and,  as  we  must  take  it  on 


oOO  STUART    V.    SEARS.  [CHAP.  II. 

the  finding  of  the  jury,  to  the  full  amount  which  the  oats  came  shoit  of 
the  1900  bushels.  All  the  excess  of  payment  arose  from  a  count  of  half 
bushels  as  bushels.  And  the  only  question  in  the  least  open  is,  whether  an 
agreement,  based  on  that  mistake,  to  accept  the  oats  at  the  plaintiff's  own 
risk  of  the  quantity,  shall  conclude  him.  The  mistake  which  entitles  to 
this  action  is  thus  stated  by  the  late  Chief  Justice  Savage  from  the  civil 
law  :  "  An  error  of  fact  takes  place,  either  when  some  fact  which  really  ex- 
ists is  unknown,  or  some  fact  is  supposed  to  exist  which  really  does  not 
exist."  Mowatt  v.  Wright.^  He  cites  the  words  of  2  Ev.  Poth.  437.  And 
see  1  Dom.  248,  B.  1,  tit.  18,  §  1,  pi.  1.  In  judging  of  its  legal  effect,  we 
must  look  "to  the  regard  which  the  contractors  have  had  to  the  fact  which 
appeared  to  them  to  be  true."  ^  And  when  we  see  that  the  agi-eenient  is 
the  result  of  such  a  regard,  or,  as  the  judge  said  to  the  jury,  is  based  upon 
it,  I  am  not  aware  of  any  case  or  dictum,  that,  because  part  of  the  agree- 
ment is  to  take  at  the  party's  own  risk,  or,  as  the  parties  expressed  it  here, 
hit  or  miss,  it  therefore  forms  an  exception  to  the  general  rule.  The  agree- 
ment to  risk  was,  ^^ro  tanto,  annulled  by  the  error.  The  money  was  paid 
under  a  contract  void  for  so  much  as  the  oats  fell  short  of  1900  bushels. 
The  effect  would  have  been  different  had  the  truth  been  known  to  the 
plaintiff.  See  Domat,  as  before  cited.  The  foundation  of  the  arrangement 
to  take  at  the  plaintiff's  risk  was  a  misreckoning,  one  number  being  put  in- 
stead of  another,  "  which,"  says  Domat,^  "  is  a  kind  of  error  in  fact  dift'erent 
from  all  other  errors,  in  that  it  is  always  repaired." 

The  }notio7i/or  a  new  trial  is  denied. 


CHARLES   H.   STUART  and  Oihers  v.  JABEZ   H.   SEARS. 
In  the  Supreme  Judicial  Court  of  Massachusetts,  November  15,  187(). 

[Reported  in  119  Massachusetts  Reports,  143.] 

Contract  by  Charles  H.  Stuart,  John  H.  Snow,  and  Ether  S.  Foss,  part- 
ners under  the  firm  name  of  Stuart,  Snow  &  Foss,  to  recover  $1000  for 
work  done  and  materials  furnished  by  the  plaintiffs  for  the  defendant.  The 
declaration  also  contained  a  count  for  the  same  amount,  as  money  had  and 
received  by  the  defendant  to  the  plaintiff  s  use,  and  a  count  setting  forth 
substantially  the  facts  which  appear  in  the  evidence  introduced  by  the 
plaintiffs. 

At  the  trial  in  the  Superior  Court,  before  Wilkinson,  J.,  the  evidence  on 

the  part  of  the  plaintiffs  tended  to  prove  that  the  defendant  was  liable  to 

pay,  and  did  pay,  to  the  plaintiffs  large  sums  of  money,  in  many  items. 

and  at  different  times,  due  to  the  plaintiffs  upon  different  contracts,  and 

1  1  Wend.  360.  »  1  Dom.  250,  B.  1,  tit.  18,  §  1,  pi.  11.  »  pi.  12. 


SECT.  I.]  STUART    V.    SEARS.  301 

that  an  action  was  brought  by  the  plaiutifls  against  the  d-efendant  to  re- 
cover the  balance  due,  and  that,  finally,  on  September  19,  1874,  a  final 
settlement  was  made  between  the  plaintiffs  and  defendant,  whereby  the 
action  was  discontinued  and  a  voucher  given  by  the  plaintiffs  to  the  defend- 
ant, showing  a  total  debit  account  to  the  plaintiffs  of  $63,520.29,  and  a 
credit  account  to  the  defendant  containing  the  following  item  :  "  By  cash 
sundry  times,  $40,700.00,"  and  the  following  words,  dated  Boston,  Sep- 
tember 19,  1874,  and  signed  by  the  plaintiffs:  "The  accounts  of  Jubez  H. 
Sears  are  settled  in  full  to  this  date." 

There  was  in  the  account  of  the  defendant  an  item  of  cash  paid  under 
date  of  March  13,  1874,  $1000;  and  one  other  similar  item  of  $1000 
under  date  of  May  13,  1874.  On  the  plaintiffs'  book  there  was  a  credit  of 
$1000  under  date  of  May  13,  1874,  but  no  credit  of  $1000  under  date  of 
March  13,  1874.  In  other  respects  the  accounts  of  the  parties  agreed. 
This  discrepancy  in  the  accounts  was  talked  over  by  the  parties  before  the 
settlement  and  efforts  made  to  discover  which  was  correct,  and  the  settle- 
ment was  delayed  a  week  or  more  for  that  purpose. 

As  evidence  of  said  payment,  at  the  time  of  settlement  the  defendant 
produced  a  check  for  $1000,  given  by  him  to  the  plaintiffs,  and  taken  up 
by  him,  dated  March  13,  1874,  and  a  receipt  signed  by  the  plaintiffs  for 
$1000,  "Mason  work  and  materials,"  dated  March  13,  1874. 

The  plaintiffs  testified  that,  relying  upon  the  accui-acy  of  the  date  of  the 
check  and  receipt,  they  allowed  in  the  settlement  the  $1000  charged  in  de- 
fendant's account  under  date  of  March  13,  1874.  The  plaintiffs  then 
offered  evidence  tending  to  show  that  the  true  date  of  the  check  and  re- 
ceipt was  May  13,  1874;  that  the  check  was  presented  to  the  bank  May 
15,  1874;  that  the  receipt  and  check  were  intended  for  the  payment 
made  by  the  defendant  May  13,  1874,  and  that  the  allowance  of  it,  March 
13,  1874,  was  a  mistake,  and  that  thereby  they  had  given  the  defendant 
credit  for  $1000  more  than  he  had  in  fact  paid. 

The  defendant  asked  the  judge  to  instruct  the  jury  that,  if  at  the  time 
of  said  settlement  the  plaintiffs  on  an  examination  of  the  evidence,  ui  the 
absence  of  fraud  on  the  part  of  the  defendant,  decided  to  allow  said  dis- 
puted item  of  $1000  and  did  allow  it;  and  said  settlement  was  effected  ac- 
cordingly, this  action  cannot  be  maintained. 

The  judge  declined  so  to  instruct  the  jury,  but  did  instruct  them  that 
if  there  was  a  doubtful  claim  settled  by  way  of  compromise,  without  fraud, 
the  plaintiffs  could  not  recover;  but  if  the  defendant  produced,  at  the 
time  of  settlement,  either  by  fraud  or  mistake,  the  check  and  rcceij)t  of 
^farch  13,  1874,  as  evi<lcncc  of  a  paymcTit  of  $1000  at  that  time,  whon  in 
fact  they  were  intetided  to  cover  the  payment  in  May,  and  the  plaintiffs 
were  misled  and  induced  thereby,  erroneously,  to  allow  the  charge  of  $1000, 
under  date  of  ^^arch  13,  1874,  when  no  such  payment  liad  been  made,  the 
plaintiffs  were  entitled  to  recover  the  same  back. 


302        FIRST    NAT.    BANK    OF    DMAHA   V.    THE   MASTIN    BANK.       [CHAP.  II. 

The  jury  returned  a  verdict  for  the  plaintiffs;  and  the  defendant  alleged 
exceptions  to  the  above  refusal  and  ruling. 

B.  Dean  for  the  defendant. 

W.  H.  Towne  for  the  plaintiffs. 

Gray,  C.  J.  The  instructions  to  the  jury  were  in  exact  accordance  with 
the  well  settled  law.  If  the  sum  now  sued  for  was  allowed  in  the  settle- 
ment between  the  parties,  without  fraud,  by  way  of  compromise  of  a  doubt- 
ful claim,  it  could  not  be  recovered  back ;  but  if  it  was  paid  by  the 
plaintiffs,  relying  upon  erroneous  vouchers  produced  by  the  defendant  at 
the  time  of  the  settlement,  it  might,  even  if  there  was  no  fraud,  be  recov- 
ered back  as  money  paid  by  mistake.  Riggs  v.  Hawley  ;  ^  Merchants'  Na- 
tional Bank  v.  National  Eagle  Bank  ^'^  Paige  v.  Sherman  ;  ^  Union  Bank  v. 
Bank  of  United  States.* 

Exceptions  overruled . 


FIRST  NATIONAL   BANK   OF   OMAHA    v.   THE  MASTIN    BANK 
AND    KERSEY   COATES,    Assignee. 

In  the  Circuit  Court  op  the  United  States  for  the  Eighth  Judicial 
District,  October,  1880. 

{Reported  in  2  McCrary,  438.] 

This  case  is  submitted  to  the  court  for  final  decision  upon  an  agreed 
statement  of  facts,  from  which  it  appears  that  the  plaintiff"  and  the  Mastin 
Bank,  between  July  1  and  August  1,  1878,  had  maintained  a  correspond- 
ence and  account,  and  had  remitted  to  one  another  divers  sums  of  money, 
and  also  demands,  notes,  bills,  and  accounts  against  third  parties  for  collec- 
tion and  credit.  On  the  twenty-seventh  of  August,  1878,  the  Mastin  Bank, 
then  having  a  considerable  balance  in  the  hands  of  the  plaintiff,  directed 
the  plaintiff  to  remit  said  balance  to  the  Metropolitan  National  Bank  of 
New  York,  to  the  credit  of  the  Mastin  Bank,  in  even  hundreds  of  dollars. 
At  the  time  the  books  of  the  plaintiff  showed  a  balance  due  the  Mastin 
Bank  of  a  little  more  than  $8800 ;  and  accordingly  the  plaintiff  remitted 
to  the  said  Metropolitan  National  Bank  of  New  York  $8800,  to  be  placed 
to  the  credit  of  the  Mastin  Bank.  Prior  to  that  time,  however,  the  plaintiff 
had  sent  to  the  Mastin  Bank  for  collection  a  draft  drawn  by  one  Faut  for 
$3141,  which  said  Mastin  Bank  had  collected  on  the  seventeenth  of  July, 
and  duly  credited  the  plaintiff  on  its  books ;  but  the  plaintiff  by  mistake 
omitted  to  charge  the  said  sum  to  the  Mastin  Bank,  and  therefore  sent  to 
the  Metropolitan  National  Bank  a  larger  amount  of  money  than  was  due 
to  the  Mastin  Bank.     A  few  days  after  this  transaction  the  Mastin  Bank 

1  116  Mass.  596,  598.  2  101  Mass.  231,  285. 

8  6  Gray,  511.  4  3  Mass.  74. 


SECT.  I.]      FIRST   NAT.    BANK   OF   OMAHA   V.   THE   MASTIN   BANK.  303 

failed  and  made  an  assignment  to  the  respondent,  Kersey  Coates,  assignee, 
under  the  laws  of  the  state  of  Missouri,  transferring  to  him  all  its  property 
and  credits  of  every  kind  whatsoever.  The  assignee  demanded  and  received 
from  the  Metropolitan  National  Bank  the  money  held  by  it  to  the  credit  of 
the  Mastin  Bank,  including  the  sum  which  plaintiff  had  sent  to  it  by  mis- 
take, and  which  it  is  agreed  amounts,  less  certain  credits,  to  $1816.22. 
Plaintiff,  as  soon  as  advised  of  the  mistake,  demanded  the  return  of 
the  money  from  the  Mastin  Bank,  as  well  as  from  the  Metropolitan  Na- 
tional Bank,  and  also  made  the  same  demand  upon  the  assignee  after  his 
appointment. 

J.  M.  Wuolivorlh  for  complainant. 
Pratt,  Brumback  <£•  Ferry  for  respondent. 

McCrary,  Circuit  Judge.  —  The  fact  is  admitted  by  the  agreed  statement 
that  plaintiff  sent  to  the  Metropolitan  National  Bank  in  New  York,  to 
be  placed  to  the  credit  of  the  ]\[astin  Bank,  the  money  now  in  controversy 
in  consequence  of  a  mistake  of  fact.  When  plaintiff  stated  the  account  in 
order  to  ascertain  the  sum  to  be  sent  to  the  New  York  Bank,  one  item 
thereof  was  omitted  by  reason  of  an  error  of  the  accountant,  or  because  the 
bank  had  not  received  notice  at  that  time  of  the  collection,  by  the  Mastin 
I>ank,  of  the  Faut  draft.  The  result  of  the  transaction  was  that  the  plain- 
tiff sent  to  the  Metropolitan  National  Bank,  to  be  credited  to  the  Mastin 
Bank,  more  money  than  was  due  to  the  latter ;  or,  in  other  words,  there 
was  placed  in  the  hands  of  said  Metropolitan  National  Bank  $1816.22  which 
did  not,  in  equity,  belong  to  the  Mastin  Bank.  It  was,  however,  placed  to 
the  credit  of  that  bank,  and  after  the  assignment  it  passed  into  the  hands 
of  the  assignee. 

As  between  the  original  parties  to  this  transaction  it  cannot  be  claimed 
that  the  Mastin  Bank  acquired  any  interest  in  or  right  to  the  money  now 
in  dispute.  It  is  a  principle  of  equity  too  plain  to  require  a  citation  of 
authorities  to  support  it,  that  where  one  person,  by  mistake,  delivers  to 
another  money  or  property  without  consideration,  he  may  recover  it  back  ; 
and  where  the  identical  property  cannot  be  found  and  recovered,  equity 
permits  him  to  pursue  and  recover  the  proceeds  wherever  he  can  find  them, 
unless  they  have  passed  into  the  hands  of  an  innocent  holder.  AVliere  both 
parties  intended  the  delivery  of  a  particular  sum  of  money,  and  where,  by 
the  mistake  of  both,  a  larger  sum  *  was  delivered,  the  party  receiving  the 
excess  becomes,  in  equity,  a  trustee  for  the  real  owner  thereof  and  l)ound 
to  deliver  it  upon  demand  to  him.  The  ground  upon  which  this  rule  pro- 
ceeds is,  that  mistake  or  ignorance  of  facts  is  a  proper  subject  of  relief 
when  it  constitutes  a  material  ingredient  in  the  contract  or  acts  of  the 

1  Conf.  Utica  Bank  v.  Van  Gieson,  18  Woml.  43.>. 

It  was  held  in  Lamb  v.  CranficliJ,  43  L.  J.  Ch.  408,  by  Jessel,  M.  K.,  tb;it  tbo  sole 
remedy  for  the  recovery  of  nioiicy  ho  paid  was  at  law.  Sec,  however,  IJiiijjhaiii  v.  I'.ing- 
ham,  suimt,  73 ;  Henderson  r.  Overton,  2  Yerg.  394  ;  Neal  v.  Read,  7  Bax.  334.  —  Ed. 


304  HAKKIS   V.    LOYD.  [CHAP.  II. 

parties,  and  disappoints  their  intention  by  a  mutual  error,  or  where  it  is 
inconsistent  with  good  faith,  and  proceeds  from  the  violation  of  tlie  obli- 
gations which  are  imposed  by  law  upon  the  conscience  of  either  party. ^ 

It  is  equally  clear  that  the  plaintiff  has  a  right  to  relief  against  the 
assignee  who  claims  by  a  general  assignment  under  the  laws  of  Missouri, 
for  the  reason  that  the  assignee  is  deemed  to  possess  the  same  equities 
only  as  tlie  debtor  himself  would  possess.^ 

It  is  my  opinion  that  upon  the  principles  of  equity  the  plaintiff  is  en- 
titled to  recover  the  sum  of  money  in  controversy  in  this  suit,  and  decree 
will  be  entered  accordingly. 


(d.)   A  claim  may  he  paid  under  a  MistaJce  as  to  a  CoUatei-al  Fact. 

HARRIS   AND   Another,   Assignees  of  CARTER   v.  LOYD. 

In  the  Exchequer,  Trinity  Term,  1839. 

[Reported  in  5  Meeson  ^-  Wehbj/,  432.] 

Assumpsit  for  money  had  and  received.  Plea,  noji  assumpsit.  At  the 
trial  before  Lord  Denman,  C.  J.,  at  the  last  Warwick  Assizes,  the  plaintifis, 
who  sued  as  assignees  of  Carter  under  a  trust-deed  for  the  benefit  of  cred- 
itors, sought  to  recover  from  the  defendant,  the  sheriff  of  the  county  of 
Warwick,  the  sum  of  57/.,  being  the  amount  of  an  execution  levied  on  the 
goods  of  Carter.  It  appeared  that  the  assignment  to  the  plaintiffs  was  exe- 
cuted on  the  5th  Jane,  1838.  On  the  same  day,  but  before  the  execu- 
tion of  the  assignment,  a  writ  of  Ji.  fa.  against  the  goods  of  Carter  was 
delivered  to  the  sheriff's  agent  in  London,  and  a  warrant  granted  thereon, 
under  which  the  officer  took  possession  on  the  6th.  The  plaintiffs,  in  order 
to  release  the  goods,  paid  the  officer  the  amount  of  the  levy,  under  protest, 
and  he  thereupon  withdrew  from  possession.  It  subsequently  turned  out 
that  Carter  had  committed  an  act  of  bankruptcy  on  the  2d  of  June,  on 
which  a  fiat  issued  on  the  18th,  and  the  plaintiffs  thereupon  brought  this 
action  to  recover  back  the  money  so  paid  to  the  sheriff's  officer,  as  having 
been  paid  under  a  mistake  of  fact,  they  not  having  at  the  time  had  any 
knowledge  of  the  act  of  bankruptcy.  The  Lord  Chief  Justice  was  of  opin- 
ion that  this  was  not  such  a  mistake  of  fact  as  entitled  the  plaintiffs  to 
recover  back  the  money,  and  accordingly  directed  a  nonsuit,  but  gave 
leave  to  the  plaintiffs  to  move  to  enter  a  verdict  for  571. 

In  Easter  term,  Balguy  obtained  a  rule  nisi  accordingly,  against  which 

Humfrey  and  Hayes  now  showed  cause. 

Balguy  and  Flood,  contra. 

1  Story  Eq.  Jnr.  §  151.  2  Story  Eq.  Jur.  §  1228. 


SECT.  I.]  AIKEN    V.    SHOKT.  305 

Lord  Abinger,  C.  B.  I  am  of  opinion  that  this  rule  ought  to  be  dis- 
charged. The  phiintiffs  appear  to  have  been  mere  volunteers.  Suppose 
the  friends  of  the  debtor  had  paid  the  money,  and  the  possession  of  the 
goods  had  been  thereupon  delivered  back  to  him  ;  could  they  have  recov- 
ered it  back,  upon  its  afterwards  tuniing  out  that  he  had  previously  com- 
mitted an  act  of  bankruptcy]  The  plaintiffs  claim  under  a  deed  of 
assignment,  and  pay  the  money,  supposing  that  under  it  they  have  a  right 
to  the  goods;  in  that  they  are  mistaken.  But  the  goods  were  liable  to 
seizure ;  the  property  in  them  was  nut  indeed  divested  by  the  writ,  and 
the  trustees  might  take  them,  but  only  subject  to  the  right  of  the  execu- 
tion creditor.  Then  it  is  said  the  delivery  of  the  writ  was  not  to  the  sher- 
iff, but  only  to  his  agent  in  London;  I  think  that  makes  no  difference 
whatever.  The  short  answer,  however,  to  the  action  is,  that  the  money 
was  not  paid  under  a  mistake  of  fact,  but  upon  a  speculation,  the  failure 
of  which  cannot  entitle  the  plaintiffs  to  recover  it  back. 

Aldersox,  B.  This  is  money  paid,  not  under  a  mistake,  but  under  a 
bargain.  True,  it  turns  out  to  be  a  bad  bargain  ;  but  that  will  not  affect 
its  validity.  But  farther,  the  money  is  paid  to  the  sheriff  for  the  purpose 
of  being  paid  over  to  the  execution  creditor,  subject  only  to  the  plaintiffs' 
supposed  right  under  the  deed.  By  the  delivery  of  the  writ  to  the  sheriff 
the  goods  are  bound,  and  the  property  in  them  cannot  afterwards  be  trans- 
ferred by  the  debtor,  except  subject  to  the  interest  of  the  execution  cred- 
itor. There  can  be  no  doubt  that  the  delivery  to  the  deputy  in  London  is 
a  delivery  to  the  sheriff;  the  deputy  is  appointed  for  that  very  purpose. 
The  plaintiffs  were  wrong,  and  the  sheriff  right,  at  the  time  of  the  payment, 
and  it  was  the  duty  of  the  sheriff  to  pay  over  the  money  to  the  execution 
creditor.  Can  it  be  argued,  that  after  such  payment  over,  he  can  be  com- 
pelled to  refund  it  ]  I  think  not.  I  am  of  opinion,  therefore,  that  the  rule 
ought  to  be  discharged. 

GuRNEY,  B.,  and  Maule,  B.,  concurred. 

Hide  discharged. 


AIKEN,   Public   Officer,    etc.   v.   ELIZABETH   SHORT,   Executrix 
OP  FliANCTS   SHOKT. 

In  the  Exchequer,  Jlxe  7,  1850. 

[Reported  in  1  Ilurhtone  <$•  Norman,  210.) 

Action  for  money  had  and  received.     Plea  never  indebted. 

At  the  trial  before  Platt,  B.,  at  the  Middlesex  sittings,  in  last  Hilary 
term,  the  following  facts  were  proved  :  The  defendant  was  the  widow  and 
Bole  executrix  of  Fnincis  Short,  who  died  in  IH.');],  One  Edwin  Cnrtcr  had 
made  a  will,  dated  February  ISKi,  liy  uhitli   he  gave   his  property  o<iUiiIly 

20 


306  AIKEN   V.    SHORT.  [CHAP.  II. 

amongst  his  eight  brothers  and  sisters,  of  whom  George  Carter  was  one. 
This  will  was  proved  after  his  death,  which  took  place  in  184:7,  by  John 
Carter  the  younger.  George  Carter  being  largely  indebted  to  Stuckey's 
Banking  Company,  by  deed  dated  the  15th  January,  1855,  conveyed  to 
the  banking  company  his  one-eighth  share  in  the  property  of  Edwin  Car- 
ter, to  which  he  professed  to  be  entitled  under  this  will,  subject  to  the 
cliarges  upon  it.  George  Carter  was  at  that  time  indebted  to  the  defend- 
ant, as  executrix  of  Francis  Short,  in  the  .sum  of  200/.,  which  was  secured 
by  an  equitable  mortgage  of  the  property  devised  to  him  by  Edwin  Carter's 
will,  and  by  the  joint  and  several  bond  of  George  Carter,  John  Carter,  and 
Charles  Carter,  dated  October,  1850.  The  equitable  charge  was  recited  in 
the  deed  of  the  15th  January,  and  at  the  time  of  the  execution  of  that 
deed  it  was  agreed,  as  between  George  Carter  and  the  bank,  that  the  bank 
should  pay  off  this  sum  of  200/.  and  interest.  In  May,  1855,  the  bank 
made  arrangements  to  sell  the  property.  Before  the  execution  of  the  con- 
veyance one  Ixichardsun,  acting  as  attorney  for  the  defendant,  applied  to 
the  bank  for  payment  of  the  200/.,  and  interest,  stating  that  he  had  applied 
to  George  Carter,  who  had  referred  him  to  the  bank.  The  bank  accord- 
ingly, through  their  attorney,  paid  to  the  defendant  the  sum  of  226/.  16^. 
6(7.  The  bond  and  instrument  of  mortgage  were  handed  over  by  the  de- 
fendant to  the  bank,  and  they  took  a  receipt  for  the  money  due  on  the 
bond  and  mortgage.  In  August,  1855,  John  Carter  produced  a  will  of 
Edwin  Carter,  dated  April,  1846,  which  appeared  to  be  the  true  last  will  of 
Edwin  Carter.  This  will,  the  existence  of  which  had  been  kept  secret  by 
the  Carters,  had  been  prepared  in  the  office  of  Francis  Short,  the  defend- 
ant's testator,  and  was  attested  by  him.  Under  this  will  George  Carter 
took  only  an  annuity  of  100/.,  which  ceased  upon  his  making  any  assign- 
ment. The  bank  then  applied  to  the  defendant  to  refund  the  226/.  16s. 
6c/.  previously  paid  by  them  to  her,  and  on  her  refusal  to  repay  the  money 
brought  the  present  action  to  recover  it  back.  Upon  these  facts,  the 
learned  judge  directed  a  verdict  for  the  plaintiff,  reserving  leave  to  the  de- 
fendant to  move  to  enter  a  verdict  for  him. 

Montague  Smith  in  the  same  term  obtained  a  rule  nisi  accordingly^ 
against  which 

Knowles  and  Field  now  showed  cause. 

J/.  Smith  and  Gray  in  support  of  the  rule. 

Pollock,  C.  B.  AVe  are  all  of  opinion  that  the  rule  must  be  absolute. 
The  case,  when  examined,  is  quite  clear,  and  the  facts  lie  in  a  narrow  com- 
pass. The  defendant's  testator,  Short,  had  a  claim  on  Carter,  —  a  bond 
and  a  security  on  property  which  Carter  afterwards  mortgaged  to  the 
bank.  The  defendant,  who  was  the  executrix  of  Short,  applied  to  Carter 
for  payment.  He  referred  her  to  the  bank,  who,  conceiving  that  the  de- 
fendant had  a  good  equitable  charge,  paid  the  debt,  as  they  reasonably 
might  do,  to  get  rid  of  the  charge  affecting  their  interest.     In  consequence 


SECT.  I.]  AIKEN   V.   SHORT.  307 

of  the  discovery  of  a  later  will  of  Edwin  Carter,  it  turned  out  that  the  de- 
fendant had  no  title.  The  bank  had  paid  the  money  in  one  sense  without 
any  consideration,  but  the  defendant  had  a  perfect  right  to  receive  the 
money  from  Carter,  and  the  bankers  paid  for  him.  They  should  have  taken 
cnre  not  to  have  paid  over  the  money  to  get  a  valueless  security ;  but  the 
defendant  has  nothing  to  do  with  their  mistake.  Suppose  it  was  announced 
that  there  was  to  be  a  dividend  on  the  estate  of  a  trader,  and  persons  to 
whom  he  was  indebted  went  to  an  office  and  received  instalments  of  the 
debts  due  to  them,  could  the  party  paying  recover  back  the  money  if  it 
turned  out  that  he  was  wrong  in  supposing  that  he  had  funds  in  hand  { 
The  money  was,  in  fact,  paid  by  the  bank,  as  the  agents  of  Carter. 

Platt,  B.  I  am  of  the  same  opinion.  The  action  for  money  had  and 
received  lies  only  for  money  which  the  defendant  ought  to  refund  ex  cequo 
et  bono.  Was  there  any  obligation  here  to  refund  ]  There  was  a  debt  duo 
to  Short,  secured  by  a  bond  and  a  supposed  equitable  charge  by  way  of 
collateral  security.  The  property  on  which  Short  had  the  charge  was  con- 
veyed by  Carter  to  the  bank.  Short  having  died,  the  defendant,  his  execu- 
trix, applied  to  George  Carter  for  payment  of  the  debt  due  to  her  husband, 
the  testator.  Carter  referred  her  to  the  bank,  who  paid  the  debt,  and  the 
bond  was  satisfied.  The  money  which  the  defendant  got  from  her  debtor 
was  actually  due  to  her,  and  there  can  be  no  obligation  to  refund  it. 

Bramwell,  B.  My  brother  Martin,  before  he  left  the  court,  desired  me 
to  say  that  he  was  of  the  same  opinion,  and  so  am  I.  In  order  to  entitle  a 
person  to  recover  back  money  paid  under  a  mistake  of  fact,  the  mistake 
must  be  as  to  a  fact  which,  if  true,  would  make  the  person  paying  liable  to 
pay  the  money  ;  not  where,  if  true,  it  would  merely  make  it  desirable  that 
he  should  pay  the  money. ^  Here,  if  the  fact  was  true,  the  bankers  were  at 
liberty  to  pay  or  not,  as  they  pleased.  But  relying  on  the  belief  that  the 
defendant  had  a  valid  security,  they,  having  a  subsequent  legal  mortgage, 
chose  to  pay  off  the  defendant's  charge.  It  is  impossible  to  say  that  this 
case  falls  within  the  rule.  The  mistake  of  fixct  was,  that  the  bank  tliought 
that  they  could  sell  the  estate  for  a  better  price.  It  is  true  that  if  the 
plaintiff  could  recover  back  this  money  from  the  defendant,  there  would  be 
uo  difficulty  in  the  way  of  the  defendant  suing  Carter.  In  Pritchard  v. 
Hitchcock  '  a  creditor  was  held  to  be  at  liberty  to  s«ie  upon  n  guarantee 
of  bills,  though  the  bills  had  been  in  fact  paid,  but  the  money  afterwards 
recovered  back  by  the  assignees  of  the  acceptor,  Jis  liaving  been  j)aid  by 
way  of  fraudulent  preference.  But  that  does  not  show  that  the  jilaintiUs 
can  maintain  this  action,  and  I  am  of  opinion  they  catmot,  having  vohuita- 
rily  parted  with  their  money  to  purchase  that  which  the  defendant  had  to 
sell,  though  no  doubt  it  turned  out  to  bo  different  to,  and  of  less  value 
than,   what  they  expected. 

Rule  absolute. 

1  See  Wilboii  r.  Thonibury,  b.  R.  10  Ch.  239.  »  0  M.  &  0.  151. 


308  CHAMBERS   V.   MILLER.  [CHAP.  II 

CHAMBERS  v.   MILLER  and   Others. 
In  the  Common  Pleas,  November,  20,  1862. 

[Reported  in  13  Common  Bench  Reports,  New  Sei'ies,  125  ] 

This  was  an  action  for  an  assault  and  false  imprisonment.  The  defend- 
ants justified  the  assault  under  the  circumstances  hereinafter  stated. 

The  cause  was  tried  before  Erle,  C.  J.,  at  the  sittings  in  London  after 
the  last  term.  The  facts  which  appeared  in  evidence  were  as  follows  :  — 
The  plaintiff,  who  was  clerk  to  a  merchant  at  Sunderland,  went  to  the 
banking-house  of  Woods  &  Co.  at  that  place  (the  defendants),  and  presented 
to  one  of  the  cashiers  named  Armstrong  a  check  for  151/.  IO5.  6d.,  drawn 
upon  the  bankers  by  one  of  their  customers.  Armstrong — who  had  been 
absent  a  few  weeks  from  the  bank,  and  therefore  was  not  aware  that  the 
drawer's  account  was  insufficient  to  meet  the  check  —  received  the  check, 
and  took  the  amount  from  the  till  in  notes,  gold,  and  silver,  aud  placed  it 
on  the  counter  and  went  away.  The  plaintiff  drew  the  money  towards  him, 
counted  it  over,  and  was  in  the  act  of  counting  it  a  second  time,  when  the 
cashier  (who  had  in  the  mean  time  ascertained  on  inquiry  that  the  account 
of  the  drawer  was  very  considerably  overdrawn)  returned  and  said  that  the 
check  could  not  be  paid.  The  plaintiff,  however,  having  possession  of  the 
money,  put  it  in  his  pocket;  whereupon  the  cashier  detained  him  until  he 
returned  the  money,  nnder  a  threat  of  giving  him  into  custod}-^  on  a  charge 
of  stealing  it,  and  restored  the  check  uncancelled,  which  was  afterwards 
presented  to  the  drawer  and  paid  by  him. 

Upon  these  facts,  his  Lordship  ruled  that  the  property  iu  the  money 
had  passed  to  the  bearer  of  the  check,  and  consequently  that  the  defend- 
ants' justification  failed. 

The  jury  returned  a  verdict  for  the  plaintiff,  damages  20/. 

Bovill,  Q.  C,  on  a  former  day  in  this  term,  pursuant  to  leave  reserved  to 
him  at  the  trial,  obtained  a  rule  nisi  to  enter  a  verdict  for  the  defendants. 
He  submitted,  that,  as  the  plaintiflf  was  still  counting  the  money  at  the 
time  the  payment  was  recalled,  there  had  been  no  complete  acceptance  on 
his  part  to  vest  the  property  in  him  ;  and  that,  at  all  events,  the  money  was 
recoverable  back,  as  having  been  paid  under  a  mistake  of  fact,  upon  the 
principle  laid  down  in  the  cases  cited  in  the  notes  to  Man-iot  v.  Hampton.* 

Overend,  Q.  C,  and  Lewerx  now  showed  cause. 

Bovill,  Q.  C,  Manist)/,  Q.  C,  and  T.  Jones,  in  support  of  the  rule. 

Erle,  C.  J.     I  am  of  opinion  that  this  rule  should  be  discharged.     This 

1  7  T.  R.  269  ;  2  Smith's  L.  C.  5tli  Ed.,  356,  et  seq. 


SECT.  I.]  CHAMBERS   V.    MILLER.  309 

is  an  action  for  a  trespass  committed  bv  the  defendants,  in  assaulting  and 
imprisoning  tl»e  plaintift"  under  a  plea  that  certain  money  which  was  in  the 
pocket  of  the  plaintiff  was  the  property  of  the  defendants,  and  that  the 
latter  had  a  right  to  detain  him  and  take  it  from  him.  The  question 
reserved  for  our  consideration  —  and  upon  which  we  are  called  upon  to 
decide  both  as  judge  and  jury  —  is,  whether,  under  the  circumstances 
proved  at  the  trial,  the  money  had  passed  to  the  plaintiff  or  still  remained 
the  property  of  the  defendants.  The  ordinary  rule  of  law  is,  tliat  the 
property  in  a  chattel  passes  according  to  the  intention  of  the  parties.  In 
an  ordinary  transaction  of  sale,  where  the  proposed  seller  says  to  the  pro- 
posed buyer,  "I  will  sell  you  such  and  such  goods  at  such  a  price,"  the 
assent  of  the  buyer  signified  by  the  word  "  done "  is  enough  to  fix  the 
right  of  property.  In  the  case  of  a  gift,  the  property  passes  by  delivery. 
And  so  with  all  the  ordinary  transactions  of  life.  With  regard  to  checks, 
the  well-known  course  of  business  is  this,  —  When  a  check  is  presented  at 
the  counter  of  a  banker,  the  banker  has  authority  on  the  part  of  his  cus- 
tomer to  pay  the  amount  therein  specified  on  his  account.  The  money  in 
the  banker's  hands  is  his  own  money.  On  presentment  of  the  check,  it  is 
for  the  banker  to  consider  whether  the  state  of  the  account  between  him 
and  his  customer  will  justify  him  in  passing  the  property  in  the  money  to 
the  holder  of  the  check.  In  this  case,  the  banker's  clerk  had  gone  through 
that  process,  and  so  far  as  in  him  lay,  did  that  which  would  pass  the  prop- 
erty in  the  money  to  the  plaintiff.  He  counted  out  the  notes  and  gold  and 
placed  them  on  the  counter  for  the  plaintiff  to  take  up.  It  no  longer 
remained  a  matter  of  choice  or  discretion  with  him  whether  lie  would  pay 
the  check  or  not.  The  plaintiff  had  taken  possession  of  the  money,  counted 
it  once,  and  was  in  the  act  of  counting  it  again,  when  the  clerk,  who  had 
gone  from  the  counter,  finding  that  there  was  a  mistake,  not  as  between 
him  and  the  bearer  of  the  check,  but  as  between  him  and  (he  customer, 
returned  and  claimed  to  revoke  the  act  of  payment  which  on  his  part  was 
already  complete,  and  claimed  to  have  the  money  back.  Now,  the  bankers 
had  parted  with  the  monej',  and  the  plaintiff  had  accepted  it.  It  is  true 
he  had  not  finished  counting  it,  and  that,  if  he  had  found  a  note  too  much 
or  a  note  short,  there  was  still  time  to  rectify  the  mistake.  IJut,  according 
to  the  intention  of  the  parties,  and  the  course  of  business,  the  money  had 
ceased  to  1)C  the  money  of  the  bankers,  and  had  become  that  of  the  party 
presenting  the  check.  It  was  the  clear  opinion  cf  the  jury  that  the  prop- 
erty passed  :  and  equally  clear  am  I,  if  it  was  a  question  of  law  for  me, 
that  the  bankers  did,  l>y  fliat  which  took  place,  pass  the  proj)crty  in  the 
money  to  the  holder  of  the  check.  On  that  ground  I  am  of  opinion  that 
the  plaintiff  is  entitled  to  retain  his  venlicr.  That  which  passed  amounted 
to  payment  of  the  check  ;  and  the  plaintiff  was  entitled  to  retain  the  money. 
Some  of  the  cases  which  were  cited  might  be  applicalih;  if  the  customer 
had   obtained  l)y  mistake    from    the  banker   money  to   which    he   was  not 


310  CHAMBERS   V.   MILLER.  [CHAP.  II. 

entitled.  In  Kelly  v.  Solari,^  the  administratrix  was  not  entitled  to  receive 
the  money.  The  policy  under  which  the  payment  had  been  made  to  her 
was  a  lapsed  policy,  and  the  money  was  paid  under  a  mistake  of  foct.  That 
being  so,  and  it  being  against  all  equity  and  good  conscience  that  she  should 
retain  it,  the  money  was  held  to  be  recoverable  back.  But,  as  between  the 
parties  here,  there  was  no  manner  of  mistake.  The  banker's  clerk  chose 
to  pay  the  check  ;  and  the  moment  the  person  presenting  the  check  put 
his  hand  upon  the  money  it  became  irrevocably  his. 

Williams,  J.  I  am  entirely  of  the  same  opinion.  Drawing  the  inference 
■which  is  fairly  deducible  from  the  facts  proved,  it  seems  to  me  that  the 
person  who  acted  as  cashier  of  the  bank  upon  the  occasion  in  question 
meant  to  part  with  the  money,  and  that  the  person  who  presented  the 
check  meant  to  receive  it  and  did  receive  it.  There  was  a  complete  and 
absolute  transfer  of  the  money  under  the  authority  of  the  drawer  of  the 
check.  It  is  said  that  the  transaction  was  not  complete,  because  the  plain- 
tiff had  not  finished  counting  the  money,  and  therefore  that  he  did  not 
consider  that  the  matter  had  come  to  an  end.  I  cannot  by  any  means 
assent  to  that.  The  recipient  had  a  right  to  count  the  money  or  he  might 
if  he  pleased  have  taken  it  off  the  counter  without  comiting  it.  I  see  no 
ground  whatever  for  saying  that  the  transaction  was  incomplete.  There 
was  no  evidence  that  anything  further  remained  to  be  done  to  complete  it. 
The  act  of  counting  was  no  indication  on  the  part  of  the  plaintiff  that  he  hati 
not  accepted  the  money.  That  argument  was  founded  upon  a  mistaken 
■view  of  the  mode  in  which  the  question  arises.  Where  money  is  paid,  not 
in  performance  of  a  promise,  at  the  precise  day  on  which  it  ought  to  have 
been  paid,  but  in  satisfaction  of  a  breach  of  promise,  there  must  be  not 
only  payment  but  acceptance  in  satisfaction.  That,  however,  is  not  so 
where  the  payment  is  made  in  performance  of  an  agreement  on  the  precise 
day,  or  where  the  creation  of  the  right  to  receive  the  money  and  the  act 
of  payment  are  simultaneous.  In  these  cases,  where  the  money  finds  its 
way  into  the  hands  of  the  person  to  whom  the  payment  is  to  be  made,  the 
transaction  is  complete.  If,  in  this  case,  after  the  money  had  been  placed 
by  the  cashier  upon  the  counter,  and  drawn  towards  him  by  the  plaintiff, 
a  thief  had  come  in  and  stolen  it  whilst  he  was  in  the  act  of  counting  it, 
the  loss  would  clearly  have  fallen  upon  the  plaintiff,  and  the  bankers  would 
not  have  been  under  any  obligation  to  pay  the  amount  over  again.  Then 
it  is  said,  that,  the  money  having  been  paid  under  a  mistake  of  fact,  money 
had  and  received  would  lie  to  recover  it  back,  and  therefore  that  the  de- 
fondants  were  justified  in  seizing  the  plaintiff  and  forcibly  regaining  pos- 
session of  it.  It  is  quite  unnecessary  to  consider  that.  There  was  no 
mistake  of  fact  within  the  meaning  of  the  rule  on  the  subject.  One  acting 
as  the  cashier  of  the  bank,  with  the  authority  of  the  bankers,  transfers  the 
possession  of  the  money  to  the  plaintiff  under  an  impression  that  he  is  the 

1  9  M.  &.  W.  54. 


SECT.  I.]  CHAMBERS   V.   MILLER.  311 

bearer  of  a  genuine  check,  and  takes  the  check  from  him  in  the  ordinary 
way.  All  the  facts  are  precisely  as  the  cashier  apprehended  them.  There 
is  uo  mistake.  It  may  be,  that,  if  tiie  cashier  had  at  the  time  been  aware 
of  the  state  of  the  customer's  account,  he  would  not  have  paid  the  check. 
But,  if  we  were  to  go  into  all  the  remote  considerations  by  which  parties 
may  be  influenced,  it  would  be  opening  a  very  wide  field  of  conjecture,  and 
would  lead  to  infinite  confusion  and  annoyance. 

Byles,  J.  I  am  of  the  same  opinion.  The  property  in  the  money  passed 
to  the  recipient,  and  the  check  was  paid.  It  is  true  that  the  money  re- 
mained upon  the  banker's  counter.  But  a  banker's  counter  is  no  more 
than  a  table  which  is  provided  by  the  banker  for  the  more  convenient 
carrying  on  cash  transactions  between  him  and  his  customers  and  those 
who  come  to  pay  and  receive  money  there ;  and  the  same  rule  must  be 
applied  whether  the  payment  is  made  from  one  side  of  the  counter  or  the 
other.  Here,  the  check  was  received  by  the  cashier,  and  the  money  handed 
over  to  the  person  presenting  it.  The  latter  had  counted  the  money  once, 
and  was  in  the  act  of  counting  it  again,  when  the  cashier  claimed  a  right 
to  recall  it.  I  must  confess  that  I  should  be  inclined  to  hold,  as  matter 
of  law,  that,  so  soon  as  the  money  was  laid  upon  the  counter  for  the  holder 
of  the  check  to  take,  it  became  the  money  of  the  latter.  It  has  been  sug- 
gested that  it  was  still  competent  to  the  party  to  object  to  one  of  the 
notes, —  for  instance,  that  it  was  forged.  What  then  1  The  only  consequence 
would  be  that  he  would  have  a  right  to  demand  another  note  in  place  of 
it.  His  right  to  rescind  the  transaction  so  far  would  not  prevent  the  prop- 
erty in  the  rest  from  vesting  in  him.  The  only  point  upon  which  I  have 
felt  any  hesitation,  is,  whether  there  could  be  any  retractation  of  the  pay- 
ment. I  think,  however,  it  would  be  extremely  dangerous,  and  would  create 
a  great  sensation  in  tlie  city  of  London,  if  it  were  to  be  held  in  Westminster 
Hall,  that,  after  a  check  had  been  regularly  handed  over  the  banker's 
counter  and  the  money  received  for  it,  and  in  the  act  of  being  counted,  the 
banker  might  treat  the  check  as  unpaid,  because  he  has  subsequently  to 
his  taking  the  check  and  handing  over  the  amount  ascertained  that  the 
state  of  the  customer's  account  was  imfavorable.  If  it  were  so  held,  it 
certainly  would  be  so  for  the  first  time.  This  was  not  a  payment  made 
under  any  mistake  of  facts.  The  bankers  (or  their  agent,  the  cashier)  had 
full  notice  in  writing  of  all  the  facts.  And,  even  if  this  had  been  a  pay- 
ment made  under  such  a  mistake  of  facts  as  would  have  entitled  the 
bankers  to  recover  back  the  money  from  the  holder  «>f  the  cheik,  by  an 
action  for  money  had  and  received,  I  must  entirely  withliold  my  assent 
from  the  proposition  that  they  could  justify  the  act  of  seizing  tiio  jjcnson 
to  whom  they  had  voluntarily  paid  the  money,  and  picking  his  pocket.  I 
am  quite  aware  that  a  (pu^stion  has  lately  arisen,  as  to  whether  or  not  a 
party  (or  his  servants)  whose  property  is  wrongfully  in  another's  possession 
may  bv  retaking  it  administer  summary  redress  to  himself      But,  be  that 


312  merchants'   NAT.   BANK  V.   NAT.   EAGLE   BANK.       [CHAP.  II. 

as  it  may,  when  the  subject-matter  in  question  is  money,  the  possession 
and  the  property  in  which  are  inseparable,  I  entertain  no  doubt  whatever 
that  he  could  do  nothing  of  the  sort.  For  these  reasons,  it  appears  to  me 
that  there  has  been  no  failure  of  justice  here,  and  that  the  plaintiff  is 
entitled  to  retain  his  verdict. 

Keating,  J.  I  also  am  of  opinion,  upon  the  facts  proved  in  this  case, 
that  the  verdict  should  stand.  I  cannot  for  a  moment  doubt  that  the 
delivery  of  the  money  by  the  cashier  to  the  holder  of  the  check  was  com- 
plete, and  that  the  property  in  it  vested  in  the  latter.  The  cashier  counted 
out  the  money,  and  placed  it  on  the  counter  for  the  purpose  and  with  the 
clear  intention  of  putting  it  under  the  control  of  the  person  who  presented 
the  check.  This  was  no  conditional  payment,  —  as  if  the  cashier  had  said 
to  the  party,  "  I  hand  you  this  money  in  payment  of  the  check,  on  condi- 
tion of  your  counting  it,  and  assenting  to  its  correctness."  Suppose  the 
plaintiff  had  been  content  to  take  up  the  money  without  stopping  to  count 
it,  —  could  anybody  doubt  that  the  property  would  have  passed  1  It  does 
not  the  less  pass  because  the  recipient  chooses  to  count  it  before  he  puts 
it  into  his  pocket.  If,  then,  the  property  passed,  the  other  question  does 
not  arise,  ^o  case  has  ever  yet  held  that  a  party  has  a  right  to  retake 
by  force  property  which  has  already  passed  and  vested  in  another.  Mr. 
Manisty  has  suggested,  that,  even  if  the  property  passed  by  the  act  of 
payment,  it  only  passed  in  a  qualified  and  limited  manner,  leaving  the 
banker  at  liberty  to  revoke  the  payment  on  discovering  that  the  customer 
had  not  sufficient  effects  in  his  hands.  I  cannot  assent  to  that  proposition. 
Having  once  parted  with  the  money  animo  solvendi,  it  was  out  of  his  power 
to  recall  it.     The  plaintiff  is  clearly  entitled  to  retain  his  verdict. 

Rtde  discharged.^ 


MERCHANTS'  NATIONAL   BANK  v.   NATIONAL    EAGLE   BANK. 
In  the  Supreme  Judicial  Court  of  Massachusetts,  March,  1869. 

\Reported  in  101  Ufassachusetts  Reports,  281.] 

Contract  to  recover  the  amount  of  a  check  drawn  on  the  plaintiffs  by 
John  R.  Williams,  payable  to  the  order  of  Hubbard  Brothers,  and  by  them 
indorsed  and  deposited  with  the  defendants.  At  the  trial  in  the  Superior 
Court,  before  Ames,  C.  J.,  the  material  facts  appeared  as  follows  :  — 

The  plaintiff  and  defendant  banks  were  members  of  the  Boston  Clearing 
House  Association,  which  was  formed  by  banks  in  Boston  "  for  the  purpose," 
as  expressed  in  the  preamble  of  their  articles  of  association,  "of  effecting  a 
more  perfect  and  satisfactory  settlement  of  the  daily  balances  between 
them."     In  the  second  section  of  the  articles  signed  by  the  banks  consti- 

1  Pollard  V.  The  Bank  of  England,  L.  R.  6  Q.  B.  623,  accwd,  —  Ed. 


SECT.  I.]    merchants'  NAT.  BANK  V.    NAT.  EAGLE  BANK.       313 

tilting  the  association,  it  was  set  forth  that  "  the  objects  of  the  association 
are  the  effecting,  at  one  place  and  one  time,  of  the  daily  exchanges  between 
the  several  associated  banks,  and  the  payment,  at  the  same  place,  of  the 
balances  resulting  from  such  exchanges,"  By  the  eleventh  section  it  was 
provided  that  "  the  hour  for  making  the  exchanges  at  the  Clearing  House 
shall  be  ten  o'clock  before  noon,  each  day ; "  "  at  twelve  o'clock,  noon,  the 
debtor  banks  shall  pay  to  the  manager  at  the  Clearing  House  the  balances 
due  from  them  respectively;"  and  "at  half  past  twelve  o'clock  after  noon 
the  creditor  banks  shall  receive  from  the  manager,  at  the  same  place,  the 
balances  due  to  them  respectively,  provided  all  the  balances  due  from  the 
debtor  banks  shall  then  have  been  paid  to  him."  The  thirteenth  section 
provided  that  "errors  in  the  exchanges,  and  claims  arising  from  the  returns 
of  checks  or  other  cause,  are  to  be  adjusted  directly  between  the  banks 
which  are  parties  therein,  and  not  through  the  Clearing  House;"  and  a 
subsequent  section  was  as  follows  :  "  Whenever  checks  arc  sent  through 
the  Clearing  House  which  are  not  good,  they  shall  be  returned,  by  the  banks 
receiving  the  same,  to  the  banks  from  which  they  were  received,  as  soon  as 
it  shall  be  found  that  said  checks  are  not  good ;  and  in  no  case  shall  they 
be  retained  jJter  one  o'clock." 

It  was  the  usage  for  each  bank  "each  morning,  at  ten  o'clock,  to  have 
at  the  Clearing  House,  for  the  purpose  of  etiocting  settlements  with  other 
banks,  all  the  checks  and  other  demands,  such  as  bills,  etc.,  it  had  received 
against  all  the  other  banks  during  the  preceding  day,  making  them  up  into 
separate  bundles  for  each  bank,  with  a  ticket  containing  the  items  and 
aggregate  of  the  contents  of  each  bundle ;  the  settlement  was  made  at  the 
Clearing  House  upon  the  footings  of  these  tickets,  without  regard  to  the 
fact  whether  the  contents  of  the  bundle  were  correctly  ticketed,  or  formed 
good  claims  against  the  bank  charged  with  the  contents  of  the  bundle  as 
per  ticket;  and  in  from  ten  to  fifteen  minutes  past  ten  o'clock  the  messenger 
from  each  Vtank  was  able  to  receive  and  take  to  his  bank  all  the  claims  of 
the  other  banks  against  it."  Each  bank  was  known  at  the  Clearing  House 
by  a  particular  number. 

The  plaintiffs'  evidence  showed  that  Hubbard  Brothers  deposited  the 
check  with  the  defendants  on  Saturday,  June  15,  18(37,  but,  as  tlu;  banks 
were  all  closed  on  Monday,  the  17th,  it  was  not,  and  could  not  be,  sent  to 
the  Clearing  House  until  Tuesday,  June  18.  In  the  forenoon  of  the  last 
named  day  the  defendants  sent  it  to  the  Clearing  House  in  their  bundle  of 
demands  against  tfie  plaintiff  bank,  and  the  amount  of  it  was  allowed  to 
them  in  their  settlement  with  the  Clearing  House  later  in  the  day.  At 
about  quarter  past  ten  o'clock,  the  jilaintitfs'  messenger  returned  from  the 
Clearing  House  and  delivered  to  their  paying  teller  the  various  bundles  of 
demands  against  them ;  and  the  teller,  with  an  assistant,  proceeded  to  open 
and  examine  them  in  the  regular  course  of  business  of  tlie  j)laiiitins ;  as- 
certaining whether  the  contents   of  each   bundle  corresponded  with   the 


314  merchants'   NAT.    BANK   V.    NAT.    EAGLE   BANK,       [CHAP.  II. 

ticket,  and  whether  each  check  was  in  fact  drawn  upon  the  plaintiffs  and 
was  properly  signed  and  indorsed ;  marking  the  checks  with  the  respective 
numbers  of  the  banks  which  sent  them  to  the  Clearing  House ;  and  finally 
assorting  them  into  three  piles,  and  giving  each  pile  to  a  bookkeeper  to 
examine  whether  the  drawers  of  the  checks  contained  in  it  had  funds 
deposited  to  meet  the  amounts  drawn  for.  It  was  nearly  twelve  o'clock, 
■when  the  teller  finished  his  examination  so  far  as  to  deliver  the  piles  of 
checks  to  the  bookkeepers ;  and  at  half  past  twelve,  the  check  in  question, 
■with  three  others,  each  drawn  by  Williams,  and  sent  to  the  Clearing  House 
from  four  different  banks,  were  returned  to  him  by  the  bookkeepers  as  not 
good,  there  being  no  funds  to  meet  them.  At  a  quarter  before  one  o'clock, 
and  "as  soon  as  he  could  in  the  performance  of  his  other  duties,"  the  teller 
handed  the  four  checks  to  the  messenger,  with  directions  to  return  them 
to  the  banks,  with  whose  numbers  they  were  marked,  as  not  good,  and  to 
collect  the  amounts  of  them  from  those  banks.  The  messenger  made  a 
mistake  as  to  the  number  on  one  of  the  checks,  went  to  the  wrong  bank 
with  it,  and  was  obliged  to  return  to  the  plaintiffs'  banking-house  in  order 
to  ascertain  the  true  number.  In  consequence  of  this  mistake,  it  was  from 
five  to  seven  minutes  after  one  o'clock  when  he  presented  the  check  in 
question  at  the  defendants'  banking-house,  where  payment  of  it  was  refused 
by  the  defendants  on  the  ground  that  it  had  not  been  presented  before  one 
o'clock. 

The  defendants  asked  the  judge  to  rule  that  the  plaintiffs  could  not 
maintain  their  action,  "  upon  the  ground  that,  on  the  plaintiffs'  own  show- 
ing, the  check  was  not  presented  to  the  defendants  until  after  one  o'clock 
of  the  day  upon  which  it  was  left  at  the  Clearing  House,  and  by  the  articles 
of  association  the  defendants  were  not  liable  to  refund  the  amount  of  a 
check  not  good,  unless  it  was  presented  to  them  at  or  before  one  o'clock  of 
the  day  when  it  was  sent  to  the  Clearing  House ;  and  that  the  requirements 
in  regard  to  the  return  of  checks  were  to  be  availed  of  by  the  depositing 
bank  as  well  for  the  protection  of  its  depositors  as  for  itself."  But  the  judge 
ruled  "  that  the  Clearing  House  Association  was  an  agi-eement  between  the 
banks  for  their  own  benefit  and  guidance  ;  that,  if  the  plaintiffs  delivered 
the  check  to  a  messenger  before  one  o'clock,  to  be  returned  to  the  bank 
depositing  it,  in  the  usual  course  of  their  business,  and  witli  time  sufficient, 
in  the  absence  of  any  accident  or  mistake,  to  reach  the  depositing  bank  by 
one  o'clock,  it  would  be  a  compliance  with  the  vote,  especially  in  view  of 
the  language  of  the  vote  that  the  bank  should  not  retain  the  checks  after 
one ;  but  that,  irrespective  of  this  peculiar  wording  of  the  vote,  the  failure 
of  the  bank  to  return  a  check  by  one  o'clock  could  be  a  defence  to  the 
depositing  bank  only  to  the  extent  that  such  bank  was  injured  by  such 
delay ;  and  that,  if  the  bank  could  show  that  it  had  changed  its  position 
after  one,  in  consequence  of  the  non-return  of  said  check,  the  vote  of  the 
Clearing  House  would  protect  it." 


SECT.  I.]    merchants'  NAT.  BANK  V.    NAT.  EAGLE  BANK.        315 

Under  these  rulings,  the  defendants  declined  to  offer  evidence  ;  and  a 
verdict  was  taken  for  the  plaintiffs,  and  the  case  reported  for  the  revision 
of  this  court. 

C.  B.  Goodrich  for  the  defendants. 

S.  Bartlett  and  D.  Tkaxter  for  the  plaintiffs. 

Colt,  J.  This  action  is  brought  by  the  plaintiffs  to  recover  the  amount 
of  a  check  drawn  upon  them  and  paid  by  them  through  the  agency  of  the 
Boston  Clearing  House,  there  being  no  funds  of  the  drawer  in  their  hands 
at  the  time  of  the  payment. 

It  is  well  settled  by  recent  decisions  that  money  paid  to  the  holder  of  a 
check  or  draft  drawn  without  funds  may  be  recovered  back,  if  paid  by  the 
drawee  under  a  mistake  of  fact.  And  though  the  rule  was  originally  subject 
to  the  limitation  that  it  must  be  shown  that  the  party  seeking  to  recover 
back  had  been  guilty  of  no  negligence,  it  is  now  held  that  the  plaintifl'in  such 
case  is  not  precluded  from  recovery  by  laches  in  not  availing  himself  of  the 
means  of  knowledge  in  his  power.  It  is  otherwise  if  the  money  is  inten- 
tionally paid  without  reference  to  the  truth  or  falsehood  of  the  fact,  and 
with  the  intention  that  the  payee  shall  have  the  money  at  all  events. 
Appleton  Bank  v.  McGilvray ;  ^  Kelly  v.  Solari;^  Townsend  v.  Crowdy.' 
This  right  to  recover  back  the  money,  however,  will  in  no  case  be  permitted 
to  prejudice  the  payee  who  has  suffered  any  damage  or  changed  his  situation 
in  respect  to  his  debtor  by  reason  of  the  laches  of  the  plaintiff,  or  his  fiiilure 
to  return  the  check  within  a  reasonable  time. 

It  is  plain,  in  the  case  here  presented,  that  if  the  plaintiffs  had  paid  this 
check  at  their  own  counter  under  a  mistake  of  fact,  tliey  could  have  main- 
tained this  action  to  recover  it  back.  Is  there  anything  in  the  manner  in 
which  the  payment  was  in  fact  made,  or  in  the  relation  of  the  parties  to 
each  other  as  members  of  the  Clearing  House  Association,  which  prejudicially 
affects  this  right] 

It  is  declared  by  the  articles,  which  were  signed  by  the  plaintiff  and  de- 
fendant banks,  to  be  tlie  object  of  the  association  to  effect  at  one  time  and 
place  the  daily  exchanges  between  the  several  associated  banks,  and  the 
payment  of  the  balances  resulting  from  such  exchanges.  An  early  hour  is 
fixed  for  making  these  exchanges,  and  a  later  time  in  the  day  for  the  re- 
ceipt and  payment  of  balances  from  the  dclitor  and  creditor  banks.  These 
settlements  are  made,  not  from  an  cxiiininatiou  in  detail  of  the  vouchers 
presented,  but  from  memoranda  and  tickets  accompanying  thoni.  Ami  any 
mistakes  rcsidting  from  tliis  mode  of  settlement  arc  to  lie  adjusted  directly 
between  the  banks  which  are  parties  therein.  It  is  furtlicr  piovidcd  that 
"whenever  checks  are  sent  through  the  Clearing  House  whiili  arc  not  good, 
they  shall  be  returned,  by  the  banks  receiving  the  same,  to  the  lianks  from 
which  they  were  received,  as  soon  as  it  shall  bo  found  that  said  checks  are 
not  good  ;  and  in  no  case  shall  they  be  retained  after  one  o'clock."  Cndcr 
1  i  Gray,  520.  -  U  M.  &  W.  54.  =>  8  C.  15.  .n.  s.  177. 


316  merchants'   NAT.    BANK   V.    NAT.    EAGLE   BANK.       [CHAP.  11. 

this  arrangement,  the  payment  required  of  the  Clearing  House  to  a  creditor 
bank,  upon  a  check  presented,  must  be  regarded  as  only  provisional  until 
the  hour  of  one  o'clock,  to  become  complete  only  in  case  the  check  is  not 
returned  at  that  time.  And  if  by  any  mistake  of  fact  the  return  of  the 
check  is  not  so  made,  then,  as  between  the  two  banks,  it  is  to  be  treated 
as  a  payment  made  under  a  mistake  of  fact,  precisely  to  the  same  extent, 
and  with  the  same  right  to  reclaim,  which  would  have  existed  if  the  payment 
had  been  made  by  the  simple  act  of  passing  the  money  across  the  counter 
directly  to  the  payee  on  the  presentation  of  the  check.  The  manifest 
purpose  of  the  provision  is,  to  fix  a  time  at  which  the  creditor  bank  may 
be  authorized  to  treat  the  check  as  paid,  and  be  able  to  regulate  with  safety 
its  relations  to  other  parties. 

We  cannot  adopt  the  theory  that  a  failure  to  present  a  bad  check,  before 
the  time  named,  to  the  bank  sending  it  through  the  Clearing  House,  works 
an  absolute  forfeiture,  and  is  in  itself  a  perfect  bar  to  any  action  to  recover 
the  amount  of  such  check.  The  whole  arrangement,  in  all  its  provisions 
and  declared  purposes,  is  to  be  construed  together.  And  the  law  will  not 
construe  any  portion  so  as  to  subject  parties  to  a  penalty  or  forfeiture  of 
their  rights,  where  other  reasonable  interpretation  can  be  given  which  will 
give  effect  and  consistency  to  the  whole.  The  parties  have  in  terms  affixed 
no  penalty  or  forfeiture  to  the  stipulation  under  consideration,  and  a  failure 
to  comply  with  its  terms  must  leave  the  parties  in  the  same  position  and 
precisely  as  they  would  stand  when  a  payment  is  made  under  a  mistake  of 
fact  in  the  ordinary  way.  After  one  o'clock,  the  defendants,  upon  the  failure 
to  return  the  check,  had  the  right  to  consider  it  paid,  and  to  treat  it  so  in 
their  dealings  with  others.  The  report  finds  that  the  delay  in  its  return 
was  occasioned  by  a  mistake  on  the  part  of  the  messenger,  a  mistake  which 
was  quite  as  much  a  mistake  of  fact  as  if  it  had  been  produced  by  the  false 
time  of  a  clock  which  was  relied  on.  And  no  suggestion  is  made  that  there 
has  been  any  change  of  circumstances,  after  the  time  when  the  defendants 
had  a  right  to  treat  the  check  as  paid,  and  before  it  was  returned,  which 
would  now  subject  the  defendants  to  damage  or  loss,  and  render  it  unjust 
for  the  plaintiffs  to  recover. 

We  have  considered  the  case  as  if  the  agreement  required  the  return  (.f 
the  check  to  the  bank  from  which  it  was  received  before  or  at  one  o'clock  ; 
but  it  will  be  noticed  that  the  stipulation  is,  that  the  check  shall  in  no  case 
be  retained  after  one  o'clock.  Tf  it  were  necessary  to  save  a  penalty  or  a 
forfeiture,  it  might  be  held  that  the  delivery  of  it  to  a  messenger  before 
one  o'clock,  to  be  returned  to  the  bank  depositing  it,  with  sufficient  time, 
in  the  absence  of  any  accident  or  mistake,  to  reach  the  bank  before  that 
liour,  would  be  a  compliance  with  its  temas,  although  it  was  not  in  fact 
delivered  until  some  minutes  after. 

Judgment  on  the  vei-did  for  the  j)la{ntifs. 


SECT.  I.]  BOYLSTON   NATIONAL   BANK   l\   RICHAIIDSON.  317 


BOYLSTON    NATIONAL    BANK    v.    HENRY    L.    RICHARDSON 

AND   Others. 

In  the  Supreme  Judicial  Court  of  Massachusetts,  March,  18G9. 

[Reported  in  101  Massachusttts  Reports,  287.] 

Contract  for  money  had  aud  received  to  the  plaintiffs'  use.  Trial  in 
the  Superior  Court,  without  a  jmy,  befoi-e  Putnam,  J.,  who  gave  judgment 
for  the  plaintiffs,  aud  reported  the  case  to  this  court  as  follows  :  — 

"The  court  found  the  following  facts:  On  November  2G,  1SG3,  James 
Denuie  borrowed  $1000  of  the  defendants,  and  gave  them  therefor  a  check" 
in  the  usual  form,  drawn  by  himself  on  the  plaintiffs'  bank  for  that  sum, 
dated  November  25,  1863,  and  payable  to  the  bearer.  "It  was  agreed 
between  the  parties  at  that  time,  that  the  check  was  not  to  be  deposited 
immediately,  but  that  the  defendants  should  let  Dcunie  know  a  day  or  two 
before  they  wanted  the  money.  About  ten  days  afterwards,  the  defendants 
notified  Dennie  that  they  should  want  the  money  on  the  next  day,  and 
should  deposit  the  check  ;  to  which  Dennie  replied  that  there  were  no 
funds  in  the  bank  to  meet  it,  but  that  he  would  see  them  again  about  it  in 
a  few  days.  No  mention  was  made  about  the  check  by  either  party  after 
that  time,  nor  was  any  demand  made  on  Dennie  for  the  payment  of  it. 

"On  Saturday,  December  30,  1865,  the  defendants,  without  the  knowl- 
edge of  Demiie,  deposited  the  check  in  the  ordinary  way  in  the  Atlas  Bank, 
with  which  they  did  business,  together  with  other  checks  and  cash,  amount- 
ing in  all  to  the  sum  of  $5530.74,  and  this  amount  was,  on  the  same  day, 
entered  to  their  credit  in  their  account  as  kept  on  the  books  of  that  bank  ; 
but,  by  a  usage  known  to  the  defendants,  they  were  not  entitled  to  draw 
cut  the  amount  of  the  check  initil  after  one  o'clock  on  the  Monday  following, 
and  not  then  unless  it  was  collected  by  the  Atlas  Bank  of  the  Boylston  Bank 
in  settlement  through  the  Clearing  House. 

"On  Monday,  January  1,  18GG,  the  messenger  of  the  Atlas  Bank,  in 
accordance  with  the  usual  course  of  business  among  Boston  banks  and 
with  the  rules  of  the  Clearing  House  Association,  of  which  botli  banks 
were  membeis,  took  the  check  to  the  Clearing  House  for  collection  in  tiic 
ordinary  way,  and  there  delivered  it  to  the  messenger  of  the  Boylston 
liank,  who  carried  it  to  the  bank  and  handed  it  to  the  paying  teller,  whoso 
duty  it  was  to  receive  it;  which  teller,  supposing  that  Dennie  had  sufficient 
funds  to  meet  it,  passed  it  to  the  bookkeeper  as  good,  and  ho  entered  it  on 
his  books  to  the  account  of  Dennie.  All  this  was  done  in  accordance  with 
the  usual  course  of  business  at  the  bank  in  such  case.  Dennie  at  that 
time  had  not  in  fact  the  fluids  to  meet  the  check,  which  fact  was  overlooked 


318  BOYLSTON    NATIONAL    BANK    V.    RICHARDSON.  [CHAP.  II. 

or  uot  noticed  by  the  teller.     A  copy  of  Deunie's  account  with  the  bauk  at 
that  time  was  as  follows  :  — 

Dr.  BoYLSTON  National  Bank  in  acc't  with  James  Dennie.  Cr. 

Bui.     Oct.      2,  1865     .         .       $122.28       Oct.  23,  1865  .        .        .       $881.45 

23,     "  .  870  Nov.  18,     "  ...     146.16 

Nor.  17,     "       .        .         500  "  23,     "...  25 

Dec.  29,     "  .  125  "  30,     "  ...     314.67 

Dec.  1,     "  .        .        .  31 

Bill,  overdrawn        796  "  19,     "  .        .         .15 

Jan.  1,  1866  .         .         .       1000 


$122.28 

870 

500 

125 

796 

$2413.28 

$2413.28 


**  It  is  a  usage  among  the  Boston  banks,  and  a  rule  of  the  Clearing 
House,  that,  if  a  check  passed  through  that  House  to  the  bank  on  wh-ich 
it  is  drawn  is  not  good,  it  shall  be  returned  to  the  bank  from  which  it  came, 
on  or  before  one  o'clock  of  the  same  day,  otherwise  no  claim  can  be  made 
upon  that  bank  for  the  amount  of  the  check.  No  notice  was  given  to  the 
Atlas  Bank  in  conformity  with  this  rule;  the  fact  of  the  overdraft  not  being 
discovered  until  after  that  hour.  On  the  Wednesday  following,  the  paying 
teller  of  the  Boylston  Bank,  having  discovered  that  the  check  was  not 
good,  took  it  to  the  defendants,  told  them  it  was  not  good,  that  Dennie  had 
no  funds  at  the  bank  to  meet  it  at  the  time  they  received  it,  and  demanded 
of  them  the  return  of  the  money,  which  they  declined  to  pay.  It  is  a 
custom  of  the  banks  not  to  pa}'  checks  unless  the  whole  amount  of  the 
check  is  on  deposit  at  the  time  it  is  presented. 

"  Upon  the  foregoing  facts,  I  find  that  the  money  was  paid  by  the  plain- 
tiffs by  mistake,  and  that  they  are  entitled  to  recover  back  the  amount, 
with  interest,  and  order  judgment  fur  the  plaintiffs  for  that  sum;  to  which 
finding  the  defendants  e-xcept." 

W.  Gaston  and  G.  Morrill  fur  the  plaintiffs. 

T.  K.  Lothrop  and  R.  R.  Bishop,  for  the  defendants,  were  stopped  by  the 
court. 

Wells,  J.  The  plaintiffs  and  defendants  were  principals  in  the  transac- 
tion out  of  which  this  suit  arises.  The  agency  of  the  Atlas  Bank  does  not 
affect  their  relations,  or  their  rights  and  obligations  towards  each  other. 
The  Clearing  House  regulations  do  not  preclude  recovery.  They  may  bear 
upon  the  question  of  laches  as  a  question  of  fact,  but  are  not  conclusive 
upon  that  question.     Merchants'  National  Bank  v.  National  Eagle  Bank.^ 

Money  paid  under  mistake  of  fact  may  be  recovered  back,  if  there  has 
been  no  laches,  and  the  situation  of  the  other  party  remains  unchanged. 
What  constitutes  such  a  mistake  of  facts  as  will  entitle  a  party  to  re- 
cover is  a  question  of  law.  The  court  below  found  generally  that  "  the 
money  was  paid  by  the  plaintifiF  by  mistake,"  and  that  the  plaintiff  was 

1  101  Mass.  281. 


SECT.  I.]      SOUTllWICK   V.    FillST   NATIONAL   BANK   OF   MEMPHIS.  319 

entitled  to  recover  the  whole  amount  of  the  check.  The  report  does  not 
indicate  whether  the  mistake  upon  which  judgment  was  rendered  related 
to  the  character  of  the  check,  or  to  the  condition  of  Denuie's  account  at 
the  plaintiffs'  bank.  The  finding  of  the  court  is  therefore  not  conclusive 
of  the  facts,  in  either  aspect,  except  so  far  as  they  are  stated  in  the 
report. 

1.  As  to  the  character  of  the  check  ;  in  form  it  was  adapted  to  the  use 
that  was  made  of  it.  It  contained  nothing  to  restrict  its  use  in  that  mode. 
The  parul  agreement,  giving  it  full  eftect  according  to  the  terms  stated, 
dues  not  appear  to  the  court  to  restrict  the  check  from  its  ordinary  use  aa 
a  check.  It  provided  only  that  its  use  should  be  delayed,  and  that  there 
should  be  notice  to  Dennie  a  day  or  two  before  they  wanted  the  money ; 
in  both  of  which  respects  the  agreement  was  complied  with.  Its  deposit 
afterwai'ds  in  no  way  contravened  the  agreement  under  which  it  was  re- 
ceived. The  Boylston  Bank  paid  it  rightfully,  and  Dennie  cannot  complain 
of  its  use  by  the  defendants,  or  its  payment  by  the  plaintiffs.  The  payment 
may  have  been  contrary  to  Denuie's  intention,  and  in  that  sense  a  mistake  ; 
but  it  was  not  a  mistake  of  any  fact  which  disentitled  the  defendants  to 
receive  the  money  in  that  mode. 

2.  The  only  mistake  in  regard  to  the  state  of  Dennie's  account  appears 
to  be,  that  the  amount  on  deposit  was  not  sufficient.  It  does  not  appear 
that  the  plaintiffs'  teller  was  misled  in  any  way,  or  had  any  reason  to  sup- 
pose that  the  account  was  otherwise  than  it  was.  No  considerable  amount 
had  recently  been  withdrawn.  The  amount  to  Dennie's  credit  had  not 
been  reduced  during  the  preceding  month.  No  expected  credit  had  failed 
to  be  received.  It  was  simply  that  the  teller  saw  fit  to  pay  the  check 
without  taking  the  precaution  to  inform  himself  of  the  state  of  the  account. 
We  see  nothing  in  the  transaction  which  bears  the  character  of  a  mistake 
of  facts,  in  a  legal  sense,  but  only  that  of  laches. 

If  there  are  any  facts,  not  stated  in  the  report,  which  led  the  mind  of 
the  judge,  who  heard  the  case,  to  the  conclusion  at  which  he  arrived,  they 
will  avail  upon  another  hearing.  But  upon  this  statement  we  think  the 
judgment  cannot  be  supported. 

Excej)tions  sustained. 


JOHN    C.   SOUTHWTCK,   Respondbnt.   v.  THE   FIRST    NATIONAL 
BANK   OF   MEMPHIS,   Appellant. 

In  the  Court  of  Appeals  of  New  York,  ^Iarcii  8,   1831. 

[Reported  in  84  Ni-w  York  Reporlx,  420.) 

Appeal  from  judgment  of  the  (Jeueral   Term  of  tlio  Supreme  Court,   in 
the  first  judicial  department,  in  favor  of  plaintiff,  entered  upon  an  order 


329        SOUTHWICK   V.   FIEST    NATIONAL    BANK    OF   MEMPHIS.      [CHAP.  II. 

made  the  first  Monday  of  January,  1880,  overruling  defendant's  exceptions, 
and  directing  judgment  upon  a  verdict.^ 

The  nature  of  the  action  and  the  material  facts  are  set  forth  in  the 
opinion. 

Francis  C.  Barloiv  for  appellant. 

John  E.  Burrill  for  respondent. 

Earl,  J.  The  defendant  claims  that  the  plaintiff  failed  upon  the  trial 
to  establish  by  proof  the  cause  of  action  alleged  in  his  complaint.  To  de- 
termine whether  this  claim  is  well  founded,  we  will  fii'st  see  what  facts 
were  proved,  and  thus  ascertain  for  what  cause  of  action  the  recovery  was 
had,  and  then  see  if  such  cause  of  action  is  fairly  embraced  within  the  facts 
alleged  in  the  complaint. 

The  material  facts,  as  proved,  are  as  follows  :  Southwick,  Thayer  k  Co. 
•were  a  firm  doing  business  in  Memphis,  Tenn.,  and  J.  N.  Merriam  lib  Son 
were  a  firm  doing  business  in  Boston.  On  the  13th  d.ay  of  March,  1873, 
George  H.  Thayer,  a  member  of  the  Memphis  firm,  drew  a  draft  upon  that 
firm,  which  was  accepted  by  them,  for  $2500,  payable  in  Memphis  in  forty 
days,  to  the  order  of  the  Boston  firm.  The  latter  firm  indorsed  the  draft 
to  F.  P.  Merriam,  who  became  the  owner  and  holder  thereof,  and  he  sent 
the  draft  to  Memphis  for  collection.  Shortly  prior  to  the  maturity  of  that 
draft  A.  N.  Men-iam,  of  the  Boston  firm,  being  at  Memphis,  was  notified 
by  the  Memphis  firm  that  probably  they  would  not  be  able  to  pay  the  draft 
at  maturity,  and  was  asked  if,  in  that  case,  they  might  draw  on  the  Boston 
firm  a  new  draft,  the  proceeds  of  which  should  be  used  to  take  up  the  old 
draft.  This  request  was  assented  to  on  condition  that  they  should  not 
draw  the  new  draft  without  special  authority.  Early  in  May  the  Memphis 
firm  notified  the  Boston  firm  that  they  would  not  be  able  to  take  up  the  old 
draft,  and  requested  permission  to  draw.  Whereupon,  on  the  fifth  da}^  of 
May,  the  Boston  firm  sent  them  a  telegram,  as  follows  :  "  You  may  draw 
upon  us  at  sight  for  $2500,  to  pay  draft  in  our  favor."  On  the  next  day 
the  ]\Iemphis  firm  drew  upon  the  Boston  firm  a  sight  draft  for  $2500,  pay- 
able to  their  own  order  and  indorsed  by  them  ;  and  their  bookkeeper, 
Wiggs,  on  their  behalf,  took  it  to  the  defendant's  bank,  with  which  they 
had  had  previous  dealings  and  an  account,  and  asked  defendant's  cashier  if 
he  would  discount  it  and  let  his  firm  check  out  the  proceeds.  This  the 
cashier  refused,  but  he  said  he  would  take  the  draft  and  place  it  to  the 
credit  of  the  drawers  on  over  checks  owing  by  them  to  the  bank.  Wiggs 
then  consulted  the  drawers,  and  on  the  same  day,  with  their  assent,  de- 
livered the  draft  to  the  bank  to  be  discounted,  the  proceeds  to  be  credited 
to  them  in  account,  and  they  were  thus  credited.  At  that  time  the 
drawers  were  indebted  to  the  bank  in  a  much  larger  sum  than  the  amount 
of  the  draft.  The  bank  had  no  knowledge  of  the  telegram  authorizing  the 
drawing  of  the  draft,  or  of  the  purpose  for  which  the  drawers  were  author- 
1  Keported  in  20  Hun,  349. 


SECT.  I.]      SOUTHWICK   V.   FIRST   NATIONAL    BANK    OF   MEMnilS.  321 

ized  to  draw.  The  bauk  thus  became  a  bona  fide  holder  of  the  draft  for 
value,  but  not  for  value  parted  with  at  the  time.  Several  days  subse- 
quently the  Memphis  firm  drew  a  check  on  the  defendant  to  pay  the  old 
draft,  and  it  refused  to  pay  the  check,  on  the  ground  that  their  account 
was  not  then  good. 

After  receiving  the  new  draft  and  crediting  its  proceeds  to  the  account 
of  the  drawers,  the  defendant  sent  it  to  its  corresponding  bauk  in  Boston 
for  collection.  That  bank  presented  it  to  the  drawees  for  acceptance  and 
payment,  and  it  was  accepted  May  10th  and  paid  May  13th,  and  the  pro- 
ceeds were  credited  by  the  Boston  bank  to  the  defendant,  and  were  by  it 
subsequently  checked  out  in  the  course  of  its  l)usiness. 

The  Memphis  firm  was  not,  at  tlie  time  of  the  negotiation  of  the  new 
draft,  known  to  be  insolvent,  but  the}^  became  openly  insolvent  in  the 
latter  part  of  June  or  the  fore  part  of  July,  1873,  and  were  subsequently 
put  into  bankniptcy.  This  suit  was  not  commenced  earlier  than  the  29th 
day  of  July.  At  the  latter  date  the  Boston  firm  and  F.  P.  ^Merriam  as- 
signed all  their  claims  against  the  defendant  to  the  plaintiff. 

Upon  these  facts  the  court  directed  a  verdict  for  the  plaintiff,  and  its 
decision  was  probably  based  upon  the  theory  that  the  defendant  could  be 
charged  with  a  wrongful  conversion  of  the  draft,  or  upon  the  theory  that  the 
drawees  paid  the  draft  under  a  mistake  of  facts.  In  the  opinion  pronounced 
at  the  General  Term,  the  judgment  entered  upon  the  verdict  was  sustained 
upon  the  latter  theory,  and  the  learned  counsel  for  the  plaintiff,  in  his  ar- 
gument before  us,  attempted  to  sustain  it  upon  both  theories. 

It  is  entirel}^  clear  that  no  cause  of  action  for  a  conversion  of  the  draft, 
or  to  recover  back  money  paid  by  mistake,  is  alleged  in  the  complaint.  On 
the  contrary,  the  facts  alleged  show  that  there  was  no  wrongful  conversion 
of  the  draft,  and  that  the  money  was  paid  under  no  mistake  of  any  exist- 
ing facts,  and  no  mistake  is  in  any  way  alleged  or  to  be  inferred  from  the 
language  used. 

The  complaint  first  alleges  the  making  of  the  old  draft,  and  that  the 
same  was  owned  and  held  by  F.  P.  Merriam ;  that  it  had  matured  and  be- 
come pa3^able  and  had  been  forwarded  to  Memphis  for  collection  ;  that  the 
Boston  firm  authorized  the  new  draft  to  be  drawn  upon  them  in  order  to 
provide  funds  necessary  to  pay  the  old  draft,  and  agreed  to  pay  such  draft 
upon  condition  that  the  proceeds  should  be  used  for  that  purpose  only  ; 
that  the  new  draft  was  thereupon  drawn  and  delivered  to  the  defendant, 
which  was  notified  of  the  object  and  purpo.se  for  which  the  draft  was  au- 
thorized to  be  drawn,  and  fiir  which  the  same  was  drawn,  and  tiiat  it  re- 
ceived the  draft  and  undertook  and  agreed  to  collect  the  same  for  the 
purpose  aforesaid,  and  tliat  the  proceeds  thereof,  when  collected,  should  bo 
applied  to  the  payment  thereof;  that  the  draft  was  accepted  and  paid  for 
the  object  and  purpose  and  upon  the  condition  aforesaid,  but  that  tlie  de- 
fendant neglected  and  refused  to  apply  tlie  amount  paid  upon    tiie  old 

21 


322        SOUTHWICK   V.    FIRST   NATIONAL    BANK   OF   MEMPHIS.      [CHAP.  II. 

draft,  although  requested  so  to  do ;  that  the  draft  remains  unpaid  and  that 
J,  N.  Merriam  «fe  Co.  and  F.  P.  Merriam  have  sold  and  transferred  the 
same  and  the  moneys  paid  thereon  to  the  plaintiff,  together  with  all  claim 
and  cause  of  action  against  the  defendant  upon  or  by  reason  thereof,  or  by 
reason  of  the  premises  and  the  matters  before  alleged ;  and  judgment  is 
demanded  for  $2500,  and  interest  from  May  6,  1873. 

It  is  thus  seen  that  the  only  cause  of  action  alleged  in  the  complaint  is 
based  upon  the  promise  of  the  defendant  to  take  the  draft,  collect  it,  and 
apply  the  proceeds  upon  the  old  draft.  This  is  plainly  and  explicitly  set 
out.  The  proof  entirely  failed  to  establish  such  a  cause  of  action,  and  the 
objection  that  it  did  so  fiul  was  plainly  and  pointedly,  several  times,  taken 
at  the  trial. 

The  Code  requires  that  the  complaint  must  contain  a  plain  and  concise 
statement  of  the  facts  constituting  the  cause  of  action,  and  that  the  plead- 
ings must  be  liberally  construed  with  a  view  to  substantial  justice  between 
the  parties ;  and  in  section  723  ample  power  is  conferred  upon  the  court 
to  amend  pleadings  at  any  stage  of  the  action,  and  where  the  amendment 
does  not  change  substantially  the  claim  or  defence,  to  conform  the  plead- 
ings to  the  facts  proved.  Here,  although  the  defect  in  the  complaint  was 
pointed  out  in  due  time  upon  the  trial,  no  amendment  was  asked  for  or 
ordered.  This  is  not  a  case  where  the  pleadings  can  after  the  trial  be  con- 
formed to  the  proof,  as  such  an  amendment  would  change  substantially  the 
claim  of  the  plaintiff  as  alleged.  This  is  not  a  case  of  mere  variance  or 
mere  defect,  but  a  case  of  fiiilure  to  prove  the  cause  of  action  alleged  in  its 
entire  scope.  Pleadings  and  a  distinct  issue  are  essential  in  every  system 
of  jurisprudence,  and  there  can  be  no  orderly  admiuisti-ation  of  justice  with- 
out them.  If  a  party  can  allege  one  cause  of  action  and  then  recover  upon 
another,  his  complaint  will  serve  no  useful  purpose,  but  rather  to  ensnare 
and  mislead  his  adversary.  Here  the  defendant  was  brought  into  court  to 
answer  a  complaint  that  he  had  violated  his  promise  to  apply  the  proceeds 
of  the  draft,  and  he  took  issue  upon  the  alleged  promise,  and  when  he  came 
to  trial  he  was  held  liable,  not  for  any  breach  of  promise  but  for  the  money 
paid  by  the  Boston  firm  on  the  ground  of  a  conversion  of  the  di-aft,  or  the 
mistake  of  facts  which  induced  the  payment  of  the  money.  The  cause  of 
action  alleged  was  one  held  by  the  plaintiff,  as  assignee  of  F.  P.  Merriam, 
for  the  breach  of  the  promise  to  pay  the  old  draft  owned  by  him.  The 
cause  of  action  for  which  the  recovery  was  had  was  one  which  the  plaintiff 
held  as  assignee  of  J.  X.  Merriam  &  Co.,  for  the  recovery  of  the  money  paid 
by  them  upon  the  new  draft. 

It  is  no  answer  to  this  objection  that  the  defendant  was  probably  not 
misled  in  its  defence.  A  defendant  may  learn  outside  of  the  complaint 
what  he  is  sued  for,  and  thus  may  be  ready  to  meet  plaintiff's  claim  upon 
the  trial.  He  may  even  know  precisely  what  he  is  sued  for  when  the  sum- 
mons alone  is  served  upon  him.     Yet  it  is  his  right  to  have  a  complaint,  to 


SECT.  1.]      SOUTHWICK   l\   FIRST   NATIONAL   BANK   OF  MEMPHIS.  323 

leani  from  that  what  he  is  sued  for,  and  to  insist  that  that  shall  state  the 
cause  of  action  which  he  is  called  upon  to  answer,  and  when  a  plaintitf  fails 
to  establish  the  cause  of  action  alleged  the  defendant  is  not  to  be  deprived 
of  his  objection  to  a  recovery  by  any  assumption  or  upon  any  speculation 
that  he  has  not  been  injured. 

But  passing  tliis  point  the  defendant  further  contends  that  the  plaintiff 
ought  to  have  proved  a  demand  upon  it  for  the  draft,  or  the  money  paid 
thereon,  before  commencement  of  the  suit ;  but  that  he  failed  to  prove 
such  demand. 

It  is  not  disputed  by  the  plaintiff  that  such  a  demand  was  necessary 
unless  it  was  in  some  way  waived  by  the  defendant,  or  unless  it  was  iu 
some  way  estopped  from  insisting  upon  a  demand.  Whether  the  action  be 
treated  as  one  for  the  conversion  of  the  draft,  or  of  the  money  paid  thereon, 
or  for  the  recovery  of  money  paid  by  mistake,  a  demand  was  a  prerequisite 
to  the  maintenance  of  the  action  against  the  defendant,  who  lawfully  and 
innocently  received  the  draft  and  the  money  paid  thereon.  The  obligation 
of  a  party  to  refund  money  voluntarily  paid  by  mistake  can  arise  only  after 
the  notification  of  the  mistake  and  a  demand  of  payment.  Powers  v.  Bass- 
ford;*  Sluyter  v.  Williams;^  Stephens  v.  Board  of  Education;^  Stacy  v. 
Graham  ;  *  Freeman  v.  Jeffries.* 

Here  the  requisite  demand  was  not  only  not  proved,  but  was  not  alleged 
in  the  complaint.  The  only  demand  alleged  was  a  request  to  apply  the 
proceeds  of  the  new  draft  upon  the  old  one  in  pursuance  of  the  alleged 
promise  of  the  defendant.  Ko  demand  to  pay  the  money  to  the  plaintiff 
or  his  assignors  is  alleged,  and  none  was  proved  to  have  been  made  before 
the  commencement  of  the  action.  There  was  no  proof  that,  before  the  com- 
mencement of  the  action,  defendant  had  any  knowledge  of  the  telegram  of 
May  6th,  or  of  the  purpose  for  which  the  drawers  were  authorized  to  draw 
the  new  draft,  or  of  any  claim  that  the  drawees  had  paid  the  draft  under 
any  mistake,  or  that  they  claimed  that  the  money  paid  should  be  refunded 
to  them.  There  is  no  proof  even  that  it  had  any  knowledge  that  the 
draft  or  its  proceeds  had  been  improperly  diverted.  It  is  shown  that  it 
refused  to  pay  a  check  drawn  to  take  up  the  old  draft  and  declined  to  pay 
that  draft  when  presented,  but  it  is  not  shown  tliat  they  were,  at  the  time 
when  the  check  ami  draft  were  presented  for  payment,  or  at  any  other 
time  before  tlie  commencement  of  the  suit,  informed  of  the  circumstancea 
now  relied  upon  by  tlie  plaintiff,  connecting  that  draft  with  the  new  one. 

The  plaintiff,  at  the  trial,  attempted  to  show  a  demand  or  an  excuse  for 
not  making  one  by  two  letters,  and  unless  such  demand  or  excuse  is  found 
in  these  letters,  it  is  not  found  in  the  case.  The  first  letter  is  dated  May 
13,  1873,  and  was  addressed  by  the  Boston  firm  to  W.  W.  Thacher,  cashiar 
of  the  defendant  at  Memphis.     It  is  as  follows  :  — 

1  19  How.  Pr.  309.  ^  37  jio„..  Pr.  109.  »  3  Hun,  712. 

*  14  N.  Y.  40'2.  ''  \'.  U.  4  Kx.  189,  200,  201. 


324       SOUTHWICK  V.   FIRST   NATIONAL   BANK   OF   MEMPHIS.      [ClIAP.  II. 

Sir  —  We  are  much  surprised  at  the  communication  we  have  received 
this  day  from  S.  T.  &  Co.,  relating  to  the  position  you  have  taken  about 
the  draft  on  us,  viz.  :  not  honoring  their  checks  and  allowing  them  to  pay 
their  di'aft  in  our  favor. 

You  had  our  explicit  authority  to  draw  on  us  (purpose  specified  also), 
and  you  have  never  yet  had  occasion  rightly  to  doubt  our  honor  and  ability 
to  pay  all  we  contracted  to,  to  the  utmost  farthing.  We,  of  course,  recog- 
nize your  right  to  decline  to  cash  their  draft;  that  must  be  as  your  own 
judgment  dictates.  But  to  obtain  their  obligations  and  retain  the  funds  for 
two  weeks,  tlius  putting  us  to  annoyance  and  inconvenience  without  just 
cause,  is  not  in  accord  with  our  New  England  ideas  of  honorable  business 
dealing.  All  through  this  unfortunate  affair  we  have  tried  to  act  toward 
you  in  a  perfectly  frank  and  honorable  manner.  We  showed  our  hand  to 
Mr.  Davis,  and  offered  him  every  thing  we  could  and  certainly  don't  "  back 
water"  now;  but  we  can't  submit  to  transactions  of  this  kind.  We  would 
like  to  hear  why  yovi  seem  to  have  lost  confidence  in  us.  By  letting  S.  T. 
&  Co,  pay  our  draft  you  don't  hurt  your  case. 

Answer.  Yours,  etc., 

J.   M.   Merriam   &   Son. 

Here  is  no  intimation  that  the  new  draft  or  the  money  paid  thereon  had 
been  diverted  or  wrongfully  converted,  and  there  is  no  notice  of  any  mis- 
take inducing  the  payment  of  the  draft,  and  no  demand  of  any  kind. 

To  this  letter  Thacher  replied  under  date  of  May  20,  as  follows  :  — 

Gentlemen  —  Your  favor  of  the  1 3th  is  before  me  and  I  do  not  exactly 
understand  it. 

Messrs.  S.  T.  &  Co.  were  overdrawn  on  our  books,  say  ^6800  ;  they  de- 
posited with  me  a  sight  draft  on  you  for  $2500,  which  was  placed  to  their 
credit,  and  they  were  informed  at  the  time  that  no  check  would  be  allowed 
against  it,  but  it  must  go  to  reduce  their  overdraft.  I  had  no  intention  of 
taking  the  draft,  except  to  reduce  their  account. 

If  you  understand  the  transaction  different,  I  would  be  pleased  to  hear 
from  you  and  we  will  compare  notes  regai'ding  it. 

Respectfully, 

W.    W.    Thacher,  Cashier. 

This  was  a  perfectly  frank  and  fair  letter,  explaining  the  situation,  saying 
that  he  did  not  exactly  understand  the  prior  letter,  Avhich  was  certainly  ob- 
scure and  confusing,  and  asking  for  information  in  case  the  writers  of  the 
prior  letter  understood  the  facts  differently  from  what  he  stated  them. 
This  letter  contained  no  refusal  to  comply  with  any  demand  if  one  had 
been  made,  and  no  position  was  taken  therein  which  excused  a  demand,  or 
precluded  the  defendant  from  insisting  upon  one.  This,  so  far  as  appears, 
ended  the  correspondence  between  the  parties,  and  the  suit  followed.     It 


SECT.  I.]      SOUTinVICK   V.    FIRST    NATIONAL    BANK    OF   MEMPHIS.  325 

matters  uot  that  it  is  qviite  probable  that  the  defendant  would  not  have 
complied  with  a  demand  if  one  had  been  made,  for  that  does  uot  dispense 
with  the  necessity  of  making  one.  When  a  demand  is  necessary  it  is  not 
excused  by  showing  that  the  defendant  would  not  probably  have  complied 
if  one  had  been  made.  And  it  mattei-s  not  that  the  defendant  has,  upon 
the  trial,  contested  the  plaintift's  right  to  recover.  That  has  occurred  since 
the  commencement  of  the  action,  and  the  plaintiff's  right  of  action  must 
have  been  perfect  when  the  suit  was  commenced. 

The  objection  that  no  demand  was  made  was  distinctly  taken  on  the 
trial,  when  the  plaintiff  offered  in  evidence  the  first  letter,  and  in  defend- 
ant's motion  to  nonsuit  the  plaintiff  at  the  close  of  plaintiff's  evidence,  and 
again  at  the  close  of  all  the  evidence. 

"We  are  therefore  of  opinion  that  the  point  we  have  just  considered  was 
well  taken.  But  upon  the  assumption  that  the  complaint  is  sufficient  and 
that  a  proper  demand  was  made  we  are  of  opinion  that  the  facts  proved  did 
not  warrant  the  verdict  ordered. 

Here  there  was  no  conversion  of  the  draft  by  the  defendant.  It  was  de- 
livered to  it  by  the  only  persons  at  the  time  liable  thereon.  If  the  tele- 
gram of  the  drawees  be  regarded  as  an  unconditional  promise  in  writing  to 
accept  the  draft  it  did  not  bind  them  as  acceptors  because  the  defendant 
did  not  receive  the  draft  "upon  the  faith"  of  the  telegram.  1  R.  S.  769, 
§  8  ;  Greele  v.  Parker  ;  ^  Bank  of  Michigan  v.  Ely  ;  ^  Barney  v.  Worthing- 
ton  ;"^  Johnson  v.  Clark.*  After  the  defendant  received  the  draft  from  the 
drawers  it  could  hold  it  against  them  as  drawers  and  indorsers  thereof,  and 
no  one  could  control  their  dominion  over  it.  The  drawees  could  not  have 
then  sued  it  for  the  conversion  or  for  the  possession  of  the  draft,  or  to  re- 
strain any  use  which  it  might  choose  to  make  of  it.  After  the  defendant 
obtained  the  draft  all  it  did  with  it  was  to  present  it  for  acceptance  and 
payment  to  the  drawees,  and  after  payment  it  delivered  the  draft,  as  we 
must  presume,  to  them.  It  thus  parted  with  the  possession  of  the  draft 
to  them,  and  there  was  no  wrongful  conversion  of  it  of  which  they  could 
complain.  And  so  this  case  is  unlike  the  case  of  Comstock  v.  Hier,"  which 
is  very  much  relied  on  by  the  learned  counsel  for  the  plaintiff.  In  that 
case  Comstock  was  the  indorser  of  the  note  which  it  was  claimed  Hier  had 
wrongfully  converted,  and  it  was  held  that  Comstock  was  in  such  relation 
to  the  note  that  he  could  sue  for  a  wrongful  conversion  thereof,  or  for  the 
proceeds  received  upon  the  wrongful  conversion  thereof.  Tlio  recovery  was 
there  upheld  on  the  theory  of  a  wrongful  conversion  of  the  note.  But  this 
recovery  caimot  be  uphold  upon  that  theory. 

The  only  other  theory  suggested  for  the  maintenance  of  this  action  is 
that  of  mistake,  and  much  can  be  plausibly  and  forcibly  said  in  fuvor  of 
this  theory.     It  is  certainly  true  tliat  if  the  drawees  had  known  wliat  they 

1  5  Wend.  414,  17  W(-n<l.  COS.  »  37  N.  Y.  112. 

*  30  N.  Y.  210.  *  73  N.  Y.  269. 


826        SOUTHWICK   V.   FIRST   NATIONAL    BANK   OF   MEMPHIS.      [CHAP.  II, 

now  know,  or  if  they  had  known  that  the  proceeds  of  the  draft  were  to  be 
apphed  otherwise  than  upon  the  old  draft,  they  would  not  have  accepted  or 
paid  the  draft.  But  were  they  so  mistaken  that  they  can  reclaim  the 
money  voluntarily  paid  by  them  ]  It  is  not  every  mistake  that  will  lay 
the  groundwork  for  relief.  It  must  be  a  mistake  as  to  some  existing  fact, 
not  as  to  something  to  happen  or  to  be  done  in  the  future.  It  must  be  a 
mistake  as  to  some  fact  not  remotely,  but  directly,  bearing  upon  the  act 
against  which  relief  is  sought.  Dambmann  v.  Schulting.-'  If  it  were  the 
rule  to  relieve  against  mistakes  as  to  remote  or  what  are  sometimes  called 
extrinsic  facts,  great  uncertainty  and  confusion  would  attend  business 
transactions.  Here  the  draft  was  genuine,  addressed  to  the  drawees,  who 
had  authorized  it  to  be  drawn,  and  it  was  held  by  the  defendant,  which 
could  lawfully  receive  payment  thereof.  There  was  no  mistake  as  to  the 
intrinsic  facts.  The  facts  that  the  drawers  had  not  acted  in  good  faith  with 
the  drawees,  or  had  placed  the  draft  and  its  proceeds  beyond  their  control, 
so  that  the  old  draft  might  not  be  paid,  were  too  remote.  The  mistake  of 
the  drawees  was  rather  as  to  the  application  of  the  money  paid  by  them  — 
a  future  fact.  If  the  defendant  had  received  this  money  and  applied  it 
upon  the  old  draft  the  precise  expectation  of  the  drawees  would  have  been 
met  and  there  would  have  been  no  ground  of  complaint.  It  is  believed 
tliat  no  case  can  be  found  which  holds  that  a  party  paying  money,  under 
the  circumstances  existing  here,  has  been  allowed  to  reclaim  it  upon  the 
ground  of  mistake.  The  defendant's  case  may  rest  upon  principles  decided 
in  the  cases  of  Justh  v.  The  National  Bank  of  the  Commonwealth,^  and 
Stephens  v.  The  Board  of  Education.^  In  the  Justh  case  one  Gray  bor- 
rowed plaintiff's  checks  for  $40,000  upon  forged  collaterals.  He  took  the 
checks  and  had  them  certified  to  be  good  by  the  drawee  bank,  and  then  de- 
posited them  with  the  defendant,  which  received  the  money  upon  them. 
In  that  case  the  plaintiffs  clearly  parted  with  their  checks  under  a  mistake 
as  to  the  genuineness  of  the  collaterals.  If  they  had  known  that  they 
were  forgeries  they  would  not  have  parted  with  the  checks.  But  upon  the 
assumption  that  the  defendant  had  parted  with  no  value  for  the  checks, 
or  upon  the  faith  of  the  checks,  this  court  held  that  the  plaintiffs  could  not 
recover  the  amount  of  the  checks,  treating  them  as  monej'  paid  to  the  de- 
fendant. The  decision  was  also  put  upon  the  ground  that  the  defendant 
had  parted  with  value  for  the  checks,  and  thus  rests  upon  both  grounds. 
In  the  Stephens  case  one  Gill  obtained  of  the  plaintiff  a  sum  of  money 
upon  the  security  of  a  forged  mortgage,  and  paid  the  money  to  the  defend- 
ant upon  an  antecedent  debt ;  and  it  was  held  that  the  plaintiff  could  not 
reclaim  the  money.  These  decisions  and  othei's  like  them  do  not  rest,  as 
has  been  sometimes  supposed,  on  the  ground  that  money  has  no  earmark, 
but  upon  grounds  of  public  policy.  As  said  by  Judge  Andrews  in  the 
Stephens  case  :  "  It  would  introduce  great  confusion  into  conuiiercial  deal- 
1  75  N.  Y.  55.  2  56  n.  Y.  478.  «  79  N.  Y.  183. 


SECT.  I.]      SOUTHWICK  V.   FIRST   NATIONAL   BANK   OF   MEMPHIS.  327 

ings,  if  the  creditor  who  receives  money  in  payment  of  a  debt  is  subject  to 
the  risk  of  accounting  therefor  to  a  third  person  who  may  be  able  to  show 
that  the  debtor  obtained  it  from  liim  by  felony  or  fraud,"  and  if  the  plain- 
tiff in  that  case  had  shown  that  the  very  money  he  had  loaned  to  Gill  had 
been  delivered  to  the  defendant,  the  decision  must  have  been  the  same. 
In  the  case  of  Gammon  v.  Butler^  the  plaintiff  gave  her  husband  $100  in 
bills,  to  be  by  him  carried  and  delivered  to  her  children,  and  he  paid  the 
same  money  to  the  defendant  upon  an  antecedent  debt,  and  it  was  held 
that,  in  an  action  for  money  had  and  received,  she  could  not  recover,  and 
the  decision  was  based  upon  the  same  principles  laid  down  in  the  cases  of 
Justh  and  Stephens.  A  large  share  of  the  business  of  the  world  is  carried 
on  by  means  of  bills  of  exchange  drawn  upon  persons  liable  to  pay  or  for 
the  accommodation  of  the  drawers  willing  to  pay  them.  They  pass  from 
hand  to  hand  by  indorsement  or  mere  delivery,  and  are  generally  payable 
at  places  distant  from  the  places  where  they  are  drawn.  The  "  protection 
and  encouragement  of  trade  and  commerce,"  as  said  in  the  Maine  case,  and 
"considerations  of  public  policy  and  convenience,"  and"  the  security  and 
certainty  in  business  transactions,"  as  said  in  the  Stephens  case,  require 
that  when  such  a  bill  is  paid  to  one  who  holds  it  in  good  faith  and  fur 
value,  he  should  not  be  called  upon  afterward  to  account  for  the  money 
paid,  perhaps,  at  a  distant  time  or  place  after  the  accounts  with  the  drawers 
have  been  settled  and  closed,  upon  proof  that  in  transactions  between  the 
drawees  and  drawers,  of  which  the  holder  has  no  knowledge  or  means  of 
knowledge,  there  has  been  some  fraud,  or  wrong,  or  mistake  to  the  injury 
of  the  drawees.  If  this  money  can  be  reclaimed,  public  policy  is  just  as 
much  contravened  as  it  would  be  if  the  money  had  been  drawn  from  the 
drawees  by  the  drawers  and  by  them  paid  to  the  defendant.  If  the  draw- 
ers had  received  this  money  from  the  drawees  to  j)ay  the  old  draft  and  had 
used  it  to  pay  their  antecedent  debt  to  the  defendant,  it  is  conceded  that 
the  drawees  could  not  have  reclaimed  it.  How  can  it  make  any  difference 
in  principle  that  the  money  was  paid  to  the  defendant  directly  by  the 
drawees  upon  the  order  of  the  drawers  ]  Whether  the  money  was  paid  in 
the  one  way  or  the  other,  the  principles  of  public  policy  and  convenience 
lead  to  the  same  conclusion. 

It  matters  not  that  the  defendant,  not  being  a  holder  for  value  jmrted 
with  when  it  took  the  draft,  could  not  have  enforced  it  against  the  drawoes 
even  after  acceptance.  That  was  true  m  tlie  case  of  the  check  in  tiie  Justh 
case.  If  the  defendant  in  that  case  had  jiartcd  with  no  value  at  the  time 
it  took  the  checks  from  Gray,  it  could  not  have  sued  the  plaintiffs  there  as 
drawers.  Yet  after  the  plaintiffs,  through  the  drawee  baui<,  had  paid  the 
checks,  it  could  not  reclaim  the  money  paid.  Mere  the  drawees  could  have 
refused  to  accept  the  draft,  and  they  might  have  refused  to  pay  after  ac- 
ceptance, and  might  probably  have  successfully  defended  an  action  upon 

J  48  Mf.  314. 


328        SOUTHWICK   V.   FIRST   NATIONAL   BANK   OF   MEMPHIS.       [CHAP.  II. 

the  draft.  But  having  paid  the  draft,  they  must  uow  look  to  the  drawers 
who  made  an  improper  use  of  the  same,  and  who  iu  law  perpetrated  a  fraud 
upon  them,  and  they  cannot  visit  the  consequences  of  that  fraud  upon  the 
innocent  defendant. 

It  is  undoubtedly  the  rule  in  this  State  that  one  who  signs  commercial 
paper  for  the  accommodation  of  another,  for  a  particular  purpose,  can  de- 
fend, when  sued  upon  the  paper  by  a  person  who  took  it  as  security  for,  or 
to  apply  upon  an  antecedent  debt  without  parting  with  value  at  the  time,  by 
showing  that  the  paper  has  been  diverted  from  the  purpose  intended.  This 
rule  is  an  exception  from  the  general  rule  of  commercial  law  which  protects 
one  taking  such  paper  in  good  faith  and  for  value  against  the  equities  or 
defences  of  all  prior  parties  to  the  paper.^  While  this  exception  has  been 
much  assailed  in  other  jurisdictions  and  is  not  recognized  in  England,  or  in 
the  Federal  courts,  or  in  the  courts  of  many  of  the  States  of  the  Union,  it 
is  believed  that  it  more  frequently  than  otherwise  tends  to  just  results. 
The  holder  of  the  paper  in  such  cases  is  generally  soon  made  aware  of  the 
defence,  and  can  take  measures  to  protect  himself  from  harm.  But  it  is 
carrying  the  exception  one  step  further  to  hold  that  the  accommodation 
signer  of  such  paper  can  pay  it,  and  then,  at  any  time  before  the  statute  of 
limitations  has  barred  his  right,  and  after  time  has  complicated  or  changed 
the  relations  of  the  parties,  sue  to  recover  back  the  money  thus  paid. 

The  facts  seem  to  disclose  another  ground  of  defence  to  this  action.  The 
draft  was  of  value  to  the  defendant.  It  had  the  right  in  any  event  to  hold 
it  and  enforce  it  against  the  drawers,  and  the  drawees  could  not  reclaim 
the  money  paid  and  at  the  same  time  retain  the  draft.  They  should,  be- 
fore the  commencement  of  the  action,  have  demanded  the  money,  and 
tendered  back  the  draft,  and  it  is  possible  that  a  tender  at  the  trial  would 
be  sufl&cieut.  As  this  point  was  not  made  on  behalf  of  the  defendant,  we 
will  notice  it  no  further  and  give  it  no  weight  iu  our  decision. 

In  this  discussion  we  have  assumed  that  the  defendant  took  this  draft 
without  notice  of  the  purpose  for  which  the  drawees  authorized  it  to  be 
drawn.  We  are  justified  in  this  assumption  by  the  undisputed  evidence. 
If  the  case  had  been  submitted  to  the  jury,  and  they  had  found  that  the 
defendant  had  such  notice,  the  verdict  would  have  been  so  far  against  the 
evidence  that  it  would  have  been  the  duty  of  the  court,  upon  application, 
to  set  it  aside. 

Our  conclusion,  therefore,  is  that  this  recovery  cannot  be  upheld,  and 
the  judgment  should  be  reversed  and  a  new  trial  granted. 

All  concur,  except  Miller,  J.,  dissenting ;  Folger,  C.  J.,  and  Andrews, 

J.,  concurring  in  result. 

Judgment  reversed. 

1  1  Par.  N.  &  B.  218. 


SECT.  I.]        MERCHANTS'  N.  BANK   V.   N.  BANK  OF  COMMONWEALTH.      329 


MERCHANTS'   NATIONAL  BANK  v.  NATIONAL  BANK   OF  THE 
CO:dMON  WEALTH. 

Ik  the  Supreme  Judicial  Court  of  Massachusetts,  June  23,  1885. 

[Reported  in  139  Massachusetts  Reports,  513.] 

Contract  to  recover  $15,000,  the  amount  of  a  check,  dated  September  3, 
1883,  drawn  ou  the  plaintiff  by  Benjamin  F.  Burgess  &  Sons,  in  favor  of 
the  Massachusetts  Loan  and  Trust  Company,  and  by  it  deposited,  on  Sep- 
tember 3,  with  tlie  defendant.  Trial  in  this  court,  before  C.  Allen,  J., 
who  reported  the  case  for  the  consideration  of  the  full  court,  in  substance 
as  follows :  — 

The  plaintiff  and  defendant  banks  are  members  of  an  unincorporated 
association  called  the  Boston  Clearing  House  Association,  whose  rules  and 
course  of  business  are  the  same  as  set  forth  in  the  cases  of  ^Merchants' 
Bank  v.  Eagle  Bank,^  and  Exchange  Bank  v.  Bank  of  North  America,^  to 
which  reference  is  to  be  made. 

Benjamin  F.  Burgess  &  Sons  were  depositors  with  the  plaintifl'  bank  and 
kept  a  bank  account  with  it,  and  Benjamin  F.  Burgess  was  one  of  the  plain- 
tiff's directors.  They  were  indebted  to  the  plaintiff  in  the  sum  of  $83,000 
on  three  notes,  payable  on  demand,  with  a  pledge  of  warehouse  receipts 
for  1270  hogsheads  of  sugar  as  collateral  security,  and  in  the  further  sum 
of  $129,500  on  three  other  notes,  payable  on  demand,  with  a  pledge  of 
United  States  bonds  and  other  securities  as  collateral.  Demand  was  made 
for  the  payment  of  the  notes  for  $83,000  on  the  23d  or  24th  of  August, 
1883,  and,  within  two  days  after  the  demand.  Burgess  told  the  plaintiff's 
president  that  he  had  sold  or  bargained  to  sell  217  hogsheads  of  the  sugar; 
and  the  warehouse  receipts  were  thereupon  entrusted  to  Burgess,  as  agent 
of  the  bank,  to  enable  him  to  deliver  the  sugar  so  sold,  with  the  under- 
standing that  the  money  received  for  the  sugar  should  be  brought  to  the 
bank  and  applied  on  the  debt.  The  sugar  was  sold  on  August  23,  to  Nash, 
Spaulding  &  Co.,  who  gave  their  check  for  $7500,  dated  September  1,  and 
payalde  to  Benjamin  F.  Burgess  «k  Sons.  This  check  was  deposited  with 
the  plaintiff  by  that  firm,  on  September  1,  to  the  credit  of  Benjamin  F, 
Burgess  &,  Sons,  and  tlic  same  was  entered  to  their  credit  in  their  bank 
account,  the  plaintiff  not  knowing  at  the  time,  nor  until  September  5,  tJuit 
it  came  from  the  sale  of  the  sugar.  Prior  to  that  time,  when  Burgess  &, 
Sons  had  been  allowed  to  dispose  of  goods  pledged  by  them  as  collateral 
security  to  the  plaintiff  bank,  they  had  usually  deposited  the  money  or 
check  received  upon  the  sale  thereof,  and  then  given  their  own  check  for 
the  same  amount  to  pay  to  the  bank  the  amount  received  from  the  sale  of 
1  101  Mass.  281.  ^  132  Jhiss.  117. 


330     merchants'  n.  bank  v.  n.  bank  of  commonwealth,     [chap.  II. 

the  collateral  security.  There  was  no  evidence  of  any  prior  instance  in 
which  they  had  failed,  in  this  or  in  some  other  way,  to  return  to  the  bank 
the  proceeds  of  such  sale,  to  be  applied  upon  the  debt. 

On  the  morning  of  September  4,  there  was  an  apparent  balance  of 
$17,145.56  to  the  credit  of  the  firm  of  Burgess  &  Sons,  the  item  of  $7500 
being  included  as  an  item  to  their  credit,  entered  on  September  1,  as  above 
stated.  During  the  forenoon  of  September  4,  three  checks  of  Benjamin  F. 
Burgess  &  Sons,  of  $1000,  $225,  and  $200,  respectively,  were  paid  over 
the  counter  by  the  plaintiff.  On  the  same  day  the  check  in  controversy  in 
this  action  came  from  the  defendant  bank  to  the  plaintiff  bank  through 
the  Clearing  House,  where  it  had  been  provisionally  paid,  in  accordance 
with  the  usual  course  of  business  in  the  Clearing  House.  This  check  was 
received  by  the  plaintiff  at  about  noon,  and  was  in  the  first  instance  entered 
to  the  debit  of  Benjamin  F.  Burgess  &  Sons  on  the  plaintiff's  books ;  but 
at  about  one  o'clock  the  president  of  the  plaintiff  received  the  following 
communication,  signed  by  the  agent  of  J.  S.  Morgan  k  Co. :  — "  Please 
take  notice  that  any  and  all  property  and  merchandise  in  your  hands, 
pledged  to  you  by  Benjamin  Burgess  &  Sons,  and  the  proceeds  of  any  such 
property  and  merchandise,  is,  and  the  same  are,  so  far  as  not  required  for 
the  purposes  of  such  pledge,  the  property  of,  and  must  be  accounted  for, 
and  paid  over  to,  J.  S.  Morgan  &  Co."  This  led  the  president  to  think  that 
Burgess  &  Sons  were  in  financial  trouble,  and  he  then  discovered  that  no 
payment  from  the  avails  of  the  sugar  had  been  made  upon  the  indebtedness 
for  which  the  sugar  had  been  pledged  as  collateral  security.  He  looked  at 
the  condition  of  their  bank  account,  and  immediately  gave  directions  to 
send  back  the  check  of  $15,000  to  the  defendant,  and  to  demand  the  re- 
payment of  the  money,  as  the  check  was  not  good ;  and  the  entry  of  it  in 
the  account  of  Burgess  &  Sons  was  erased.  At  the  same  time,  by  the 
direction  of  the  president,  there  was  debited  to  the  account  of  Burgess  & 
Sons  $29,500,  which  was  the  amount  of  one  of  the  notes  held  by  the 
plaintiff  bank  against  them,  for  which  other  collateral  was  held  as  security, 
and  this  was  afterwards,  on  the  same  day,  corrected  by  substituting  $23,000, 
the  balance  of  one  of  the  notes  for  which  the  sugar  was  held  as  collateral, 
npon  which  demand  had  been  made.  The  messenger  started  from  the 
Merchants'  Bank  with  the  check  at  two  or  three  minutes  after  one  o'clock, 
and  demand  was  accordingly  made  upon  the  defendant  at  from  seven  to 
twelve  minutes  after  one  o'clock,  on  September  4,  on  the  ground  that  the 
check  was  not  good  ;  and  repayment  was  refused.  The  defendant  had 
entered  the  check  of  $15,000  to  the  credit  of  the  Massachusetts  Loan  and 
Trust  Company  on  the  day  of  its  deposit,  and  the  defendant  did  not  change 
its  position  towards  said  company  in  the  interval  between  one  o'clock  and 
the  time  when  the  plaintiff's  demand  was  made  as  aforesaid. 

Where  there  is  not  enough  money  on  deposit  to  pay  a  check  in  full,  the 
ordinary  custom  is  to  return  the  check  as  not  good. 


SECT.  I.]        merchants'  N.  BANK   V.    N.  BANK  OF  COMMONWEALTH.      331 

The  plaintiff  held  no  surplus  of  security  upon  either  branch  of  the 
indebtedness  of  Burgess  &  Sons  which  could  be  applied  to  make  good  the 
$7500.  The  president  of  the  plaintiff  bank,  who  was  the  only  principal 
officer  testifying,  and  who  gave  the  directions  for  the  return  of  the  check, 
had  no  knowledge  on  September  4  that  the  sugar  pledged  as  collateral 
security  was  not  sufficient  to  secure  all  of  the  notes  of  Burgess  «fc  Sons 
held  by  the  bank  for  which  the  collateral  was  given. 

Burgess  &  Sons  borrowed  from  the  plaintiff  upon  memorandum  checks, 
$2000  on  August  29,  and  $0000  on  August  31,  which  sums  were  placed  to 
their  credit  on  those  respective  dates,  Burgess  handed  the  checks  of  his  firm 
for  these  amounts  to  the  teller  of  the  plaintiff  bank,  asking  that  his  firm 
might  be  credited  with  the  amounts  thereof,  and  the  checks  "held  over  and 
charged  in  the  next  day."  These  checks  were  not  at  the  time  entered  in 
the  account  upon  the  plaintiff's  books  to  the  debit  of  Burgess  &  Sons,  but 
were  merely  kept  in  the  drawer  as  memorandum  checks.  Burgess  was 
desirous  of  getting  this  transaction  out  of  the  books  of  the  bank. 

On  September  1,  after  making  the  deposit  of  $7500  received  from  the 
sale  of  the  sugar,  Burgess  directed  the  teller  to  charge  the  two  memorandum 
checks  in  the  account,  which  was  accordingly  done,  and  these  two  charges 
are  shown  by  the  items  of  $6000  and  $2000  in  the  statement  of  account 
as  checks  charged  on  that  day.  In  this  w^ay  he  returned  and  repaid  the 
money  credited  in  the  two  checks  to  Burgess  &  Sons.  Burgess  &  Sons 
were  not  entitled  to  the  credit  obtained  on  September  1  by  the  deposit  of 
the  check  for  $7500. 

The  defendant  contended  that  the  remedy  of  the  plaintiff,  if  any,  was 
not  against  the  defendant,  but  against  the  Massachusetts  Loan  and  Trust 
Company ;  that  the  plaintiff  got  the  benefit  of  the  sale  of  the  sugar  by 
applying  the  proceeds  on  another  loan ;  and  that  for  the  above  reason,  and 
also  in  any  view  of  the  case,  there  was  no  such  mistake  of  fact  as  would 
entitle  it  to  recover. 

S.  Bartlett  and  A*.  D.  Smith  for  the  plaintiff. 

H.  D.  Hyde  and  S.  Lincoln  for  the  defendant. 

Devens,  J.  The  rules  and  course  of  business  of  the  unincorporated 
association  called  the  Boston  Clearing  House  Association  have  been  so  set 
forth  in  the  recent  decisions  of  this  court  that  they  do  not  require  to  be 
here  fully  restated.  They  were  adopted  solely  for  the  purpose  of  facilitating 
exchanges  and  the  adjustment  of  accounts  between  the  banks.  By  a  con- 
tract between  them,  an  association  is  formed,  which  is  their  connnun  banker. 
To  this  association  each  bank,  which  is  indebted  by  reason  that  more  cliecks, 
etc.,  are  j)resented,  as  drawn  upon  it,  than  it  presents,  as  drawn  against 
the  other  banks  who  arc  mornbcrs,  jiays  the  balance  found  due  from  it  to 
the  association,  while  each  bank  that  shows  a  balance  in  its  favor  receives 
from  the  association  the  amount  by  its  check.  Mistakes  that  may  be  made 
in  ihis  computation,  because  checks  are  not  good,  are  not  settled  by  the 


332     merchants'  n.  bank  v.  n.  bank  of  commonwealth,     [chap.  II. 

associatioi),  but  between  the  banks  themselves;  and  such  checks  are  to  be 
returned  by  the  banks  receiving  the  same  to  the  banks  from  which  they 
are  received  as  soon  as  it  shall  be  found  that  they  are  not  good,  "and  in  no 
case  are  they  to  be  retained  after  one  o'clock."  To  the  regulations  of  this 
association,  tlie  customers  of  the  banks  are  not  parties,  and,  whatsoever 
effect  is  to  be  given  to  them  as  between  the  banks,  their  customers  are  not 
in  a  situation  to  claim  the  benefit  of  them,  nor  are  they  liable  to  be  injuri- 
ously affected  by  them.  Merchants'  Bank  v.  Eagle  Bank  ;  ^  Bank  of  iS'^orth 
America  v.  Bangs  ;^  Manufiicturers'  Bank  v.  Thompson;^  Exchange  Bank 
V.  Bank  of  North  America.^  By  these  regulations,  it  was,  in  substance, 
agreed  in  the  case  at  bar,  that,  if  Burgess  &  Sons  had  to  their  credit  a  sum 
sufficient  to  meet  the  check  for  which  they  were  entitled  to  draw,  the 
amount  of  which  is  here  demanded,  the  provisional  allowance  of  it  at  the 
Clearing  House  should  stand  ;  but  that,  if  it  appeared  on  investigation  that 
they  were  not  entitled  to  draw  for  any  such  sum,  the  check  should  not  be 
retained  by  the  plaintiff"  bank  after  one  o'clock.  The  bank  which  had  sent 
the  check  to  the  Clearing  House  would  then  be  notified  that  it  was  not 
good,  and  that  repayment  of  the  amount  of  it  would  be  expected  by  the 
bank  on  which  it  was  drawn. 

The  check  was  not  returned  to  the  defendant  bank  until  after  one  o'clock. 
It  is  not  disputed  by  the  plaintiff",  that  if,  in  consequence  of  this,  the 
defendant  had  changed  its  position,  as  if  it  had  paid  over  the  amount  of 
the  check  to  the  owner,  who  had  deposited  it  with  the  bank  for  collection, 
the  bank  should  not  suff"er ;  but  it  contends  that  when,  by  a  mistake  as  to 
a  matter  of  fact,  it  has  delayed  the  return  of  the  check  until  after  one 
o'clock,  this  cannot  be  taken  advantage  of  by  the  bank  on  behalf  of  the 
owner  of  the  clieck,  there  having  been  no  change  in  its  position  in  the 
interval  between  one  o'clock  and  the  actual  return  of  the  check. 

The  case  of  Merchants'  Bank  v.  Eagle  Bank,^  goes  far  to  decide  the  case 
at  bar.  It  was  tliere  held  that  the  manifest  purpose  of  the  provision  in 
the  Clearing  House  rales  was  to  fix  a  time  at  which  the  creditor  bank  was 
authorized  to  treat  the  check  as  paid,  and  so  deal  with  it  in  its  relations 
with  others.  The  court  declined  to  adopt  the  theory  that  a  failure  to  return 
a  bad  check  before  one  o'clock  to  the  bank  sending  it  through  the  Clearing 
House  would  work  a  forfeiture  of  the  right  to  return  it,  or,  of  itself,  con- 
stitute a  bar  to  an  action  to  recover  its  amount ;  and  held  that  a  failure  to 
comply  with  the  stipulation  as  to  returning  the  check  would  leave  the 
parties  in  the  same  position  as  when  a  payment  is  made  under  a  mistake 
of  fact  in  the  ordinary  way.  This  case  has  been  since  cited  with  approval. 
Manufacturers'  Bank  v.  Thompson,^  and  Exchange  Bank  v.  Bank  of  North 
America.^ 

In  Preston  v.  Canadian  Bank  of  Commerce,^  it  was  held  otherwise,  and 

1  101  Mass.  281.  2  iqg  Mass.  441.  s  129  Mass.  438. 

4  132  Mass.  147.  ^  23  Fed.  Kep.  179. 


SECT.  I.]        merchants'  X.  BANK   V.   N.  BANK  OF  COMMONWEALTH.      333 

there  deculed  that  a  mistake  discovered  after  half-past  one  o'clock,  which 
was  there  the  hour  for  returning  checks,  could  not  be  corrected  by  the  bank 
making  it,  nor  the  check  then  returned.  It  is  said  by  Judge  Blodgett, 
referring  to  the  case  of  Merchants'  Bank  v.  Eagle  Bank,^  "The  Massachusetts 
court  puts  its  decision  on  the  gi'ouud  that  you  may  correct  a  mistake  of  this 
kind  at  any  time  after  it  is  discovered,  if  it  places  the  party  to  whom  the 
check  is  returned  in  no  worse  condition  than  it  would  have  been  in  if  it  had 
been  returned  wnthin  the  stipulated  time ;  thus  overlooking  the  rule  that 
parties  may  agree  that  they  shall  not  have  the  right  to  correct  mistakes 
unless  done  withhi  a  limited  time."  But  we  have  not  overlooked  the  right 
of  parties  to  make  such  agreement  as  they  choose.  The  question  is  as  to 
the  interpretation  of  the  rule  which  they,  as  members  of  the  Clearing  House, 
have  adopted.  The  rule  is,  "  Whenever  checks  which  are  not  good  are  sent 
through  the  Clearing  House,  they  shall  be  x-eturned  by  the  banks  receiving 
the  same  to  the  banks  from  which  they  were  received  as  soon  as  it  shall  be 
found  that  said  checks  are  not  good  :  and  in  no  case  shall  they  be  retained 
after  one  o'clock."  If  it  were  intended  that  mistakes  should  never  be  cor- 
rected unless  discovered  by  one  o'clock,  this  should  in  terms  explicitly 
appear.  As  it  does  not,  it  seems  to  us  the  more  correct  interpretation  to 
hold  that  the  rule  authorizes  the  bank  receiving  the  check,  after  one  o'clock 
aiTives  and  the  ciieck  is  not  returned,  to  treat  it  in  all  transactions  as  if  it 
were  good.  If,  therefore,  the  bank  changes  its  position,  it  will  suffer  no 
loss  by  reason  of  it.  On  the  other  hand,  if  the  mistake  is  discovered  after 
one  o'clock,  and  the  bank  receiving  the  check  has  not  changed  its  position 
by  reason  of  the  expiration  of  the  time,  it  should  rectify  the  mistake  when 
reasonable  care  has  been  exercised  hy  the  bank  on  which  it  was  drawn. 

The  defendant  also  relies  much  on  the  case  of  Merchants'  Ins.  Co.  v. 
Abbott,^  as  establishing  a  somewhat  different  principle  from  the  case  of 
Merchants'  Bank  v.  Eagle  Bank.  The  latter  case  is  not  there  cited,  but  we 
do  not  find  any  intention  to  impugn  its  authority.  It  appears  to  us  quite 
distinguishable  from  the  case  hove  presented.  Denny,  Rice  <k  Co.  held  a 
valid  debt  due  from  Abbott,  whose  premises  had  been  insured  by  tlio  plain- 
tiff company,  and  had  been  destroyed  by  fire.  Abbott  assigned  to  Penny, 
Puce  &  Co.  his  claim  against  the  plaintiff,  which,  at  Abbott's  request,  paid  the 
amount  of  the  loss,  as  adjusted  between  itself  and  Al)bott,  to  Denny,  Kice  &, 
Co.  There  was  no  question  of  the  validity  or  genuineness  of  the  assignment, 
and,  by  tlie  payment  made  by  the  plaintiff,  the  debt  which  Abbott  owed 
Denny,  Rico  &,  (h.  was  discliarged  and  satisfied,  and  this  might  have  been 
80  pleaded  by  Abbott  had  he  been  sued  thereon.  Tuckorman  v.  Sleeper.' 
A  year  later,  the  plaintiff  discovered  that  the  fire  had  been  caused  by 
Abbott,  and  that  his  proofs  of  loss  were  false  and  fraudulent,  and,  six 
months  afterwards,  brought  an  action  against  Abbott  and  Denny,  Rice  it  Co. 
It  was  conceded  that  Denny,  Rice  &  Co.  had  no  knowledge  of  any  fraud. 
1  101  Ma.s8.  281.  ^  131  Mass.  397.  '  9  Cash.  177. 


334    merchants'  n.  bank  v.  n.  bank  of  commonwealth,    [chap,  il 

As  to  Abbott,  it  was  not  doubted  that  the  plaintiff  might  recover.  If  the 
money  had  been  ^aid  to  him,  it  could  have  been  recovered  as  money  paid 
under  a  mistake  of  fact ;  and  the  payment  by  the  plaintiff,  at  his  request, 
in  discharge  of  his  debt  to  Denny,  Rice  &  Co.,  was  equivalent  to  a  receipt 
by  him  of  so  much  money.  But  as  to  the  other  defendants,  Denny,  Eice 
&  Co.,  the  case  was  deemed  to  stand  as  if  the  money  had  been  paid  by  the 
plaintiff  to  Abbott,  and  by  Abbott  to  them  in  the  ordinary  course  of  busi- 
ness, in  which  case  it  could  not  be  doubted  that,  while  the  plaintiff  could 
recover  the  money  from  Abbott,  neither  Abbott  nor  the  plaintiff  could 
recover  the  amount  from  Denny,  Eice  &,  Co.  There  was  not  only  no  mis- 
take between  the  plaintiff  and  Denny,  Rice  &,  Co.,  but  by  reason  of  the 
mistake  of  the  plaintiff —  produced  by  the  fraud  of  Abbott,  to  which  Denny, 
Rice  &  Co.  had  in  no  way  contributed  —  they  had  been  induced  to  surrender 
and  discharge  the  debt  which  Abbott  owed  to  them.  It  was  impossible  to 
restore  them  to  their  original  position. 

In  the  case  at  bar,  there  was  no  change  of  circumstances,  after  the  time 
when  the  defendant  had  a  right  to  treat  the  check  as  paid  and  before  it 
was  returned,  which  would  in  any  way  subject  the  defendant  to  loss,  or 
render  it  unjust  for  the  plaintiff  to  recover.  The  fact  that  the  defendant 
gave  credit  to  its  depositor  in  this  interval  did  not  make  the  defendant 
liable  to  such  depositor  when  a  mistake  was  discovered  which  showed  it  to 
have  been  erroneously  done. 

The  mistake  made  by  the  plaintiff  was  such  as  would  bring  the  case 
within  the  rule  which  has  heretofore  been  held  applicable  on  this  subject. 
There  was  no  carelessness,  as  in  Boylston  National  Bank  v.  Richardson,^ 
where  the  paying  teller  neglected  to  examine  the  account  of  the  drawer  of 
a  check,  which  account  had  not  varied  materially  for  a  month,  and  which 
had  not  been  sufficient  to  meet  the  check  for  three  months,  and  paid  it 
without  e.x:amination.  Such  a  transaction  showed  no  mistake  of  fact,  in 
any  legal  sense,  but  laches  simply.  The  teller  in  that  case  was  not  misled 
in  any  way,  and  had  no  reason  to  suppose  the  account  of  the  depositor  was 
otherwise  than  as  it  actually  appeared. 

The  mistake  in  the  case  at  bar  was,  that  the  account  of  Burgess  &  Sons 
with  the  plaintiff  bank  was  really  different  from  that  which  appeared  on  its 
books,  and  this  was  effected  by  the  wrongful  act  of  Burgess.  He  had  re- 
ceived a  check  for  $7500  for  property  belonging  t?i  s/^ecie  to  the  bank,  which 
it  was  his  duty  to  have  delivered  to  the  bank  as  its  property.  Instead  of 
doing  this,  he  deposited  the  check  as  the  property  of  Burgess  &  Sons,  and 
by  that  act  obtained  for  them  a  credit  on  the  books  of  the  plaintiff  bank 
to  which  they  were  not  entitled.  Against  the  false  balance  thus  produced 
by  depositing  the  money  of  the  bank  as  if  it  were  their  own.  Burgess  & 
Sons  fraudulently  drew  the  check  in  controversy,  and  it  led  to  the  retention 
of  the  check  until  a  few  minutes  after  one  o'clock. 

1  101  Mass.  287. 


SECT.  I.]      MERCHANTS'  N.  BANK   V.   N.  BANK  OF  COMMONWEALTH.       335 

But  if  mouey  paid  under  a  mistake  of  fact  may  be  recovered,  aud  if  the 
credit  to  which  the  defendant  was  entitled  at  one  o'clock  might  be  recalled 
on  discovery  of  such  a  mistake,  it  is  urged  that  the  plaintiff  should  then 
be  able  to  show  mistake,  misapprehension,  or  ignorance  of  some  definite 
and  material  fact  which  directly  affected  the  obligation  of  the  plaintiff  to 
pay  the  check  ■  and  that  the  credit  was  sought  to  be  recalled  under  a  vague 
apprehension  of  insecurity  produced  by  reports  of  the  embarrassment''  of 
Burgess  &  Sons.  This,  it  is  contended,  is  not  sufficient,  even  if  subsequent 
investigation  has  shown  that  the  apparent  credit  of  Burgess  &  Sons  with 
the  plaintiff  bank  was  fraudulently  obtained  in  the  mode  above  stated.  It 
appears  by  the  report  that  the  president  of  the  plaintiff  bank,  being  led  to 
think  that  Burgess  &  Sons  were  in  financial  trouble,  then  discovered  that 
the  avails  of  the  sugar  confided  to  Burgess  to  sell  had  not  been  received 
by  the  bank  upon  the  indebtedness  for  wliich  it  was  pledged  as  collateral 
security;  and,  looking  at  the  condition  of  Burgess  &  Sons'  bank  account,  he 
directed  the  return  of  the  check. 

But  even  if,  at  the  time  of  the  return  of  the  check,  the  president  could 
not  have  stated  the  exact  way  in  which  the  mistake  was  made,  when  subse- 
quently investigated  it  is  shown  to  have  arisen  from  the  same  transaction 
to  which  he  then  attributed  it,  and  which  caused  him  to  direct  the  return 
of  the  check,  namely,  the  sale  of  the  sugar  confided  to  Burgess.  He  sup- 
posed that  the  proceeds  of  the  sugar  had  not  been  paid  into  the  bank  at 
all,  while  in  fact  they  had  been  paid  in,  but  in  such  a  manner  as  to  obtain, 
by  spoken  or  acted  falsehood,  a  wrongful  credit  in  f\ivor  of  Burgess  &  Sons.' 
Nor  can  it  be  seen  why  the  plaintiff  bank  might  not  have  returned  the 
check  the  next  day,  if  there  had  been  no  change  in  the  circumstances,  and 
if  it  had  then  discovered,  as  it  actually  did,  the  exact  character  of  the  mis- 
take. It  cannot  affect  the  plaintiff  unfavorably  that  it  offered  to  do  so 
earlier,  and  on  the  same  day  it  received  the  check,  even  if  its  president 
could  not  then  formally  state  the  exact  mode  in  which  the  mistake  had 
occurred. 

The  defendant  further  urges,  that  there  has  been  such  laches  on  the  part 
of  the  plaintiff  bank  in  its  dealings  with  Burgess  that  it  is  not  entitled  to 
recover.  Dana  v.  Bank  of  the  Republic.^  On  August  23  or  24,  1883, 
demand  was  made  upon  Burgess  for  payment  of  demand  notes  which  were 
then  deemed  to  be  amply  secured  by  sugar  as  collateral  security.  Two 
days  after  this,  Burgess  told  the  plaintiff's  president  tiiat  he  had  sold  or 
bargained  for  the  sale  of  217  hogsheads;  and  the  warehouse  receipts  were 
delivered  to  him,  as  agent  of  the  bank,  to  enable  him  to  transfer  the  sugar 
sold,  with  the  understanding  that  the  money  received  therefrom  would  be 
applied  upon  the  debt  for  which  it  was  held  as  collateral  security.  A  check 
was  received  therefor,  on  Septeml)er  1,  of  $7500,  which  was  the  one  wrong- 
fully deposited  by  Burgess  to  the  credit  of  Burgess  &  Sons.     The  laches 

»  132  Mass,  150. 


336    merchants'  n.  bank  v.  n.  bank  of  commonwealth,     [chap.  II. 

which  the  defendant  alleges  is  in  failing  to  look  after  the  proceeds  of  this 
sugar  until  September  4.  But  up  to  this  time  the  plaintiflF  bank  had  not 
supposed  Burgess  &  Sons  to  be  in  financial  straits ;  they  had  always  been 
allowed  to  dispose  of  the  goods  pledged  by  them  as  collateral,  and  had 
always  faithfully  accounted  for  the  proceeds  of  the  same.  That  no  suspi- 
cions were  in  fact  excited  until  September  4,  is  quite  cleai*,  and  the  circum- 
stances are  not  such  that  we  can  say  there  has  been  laches  on  the  part  of 
the  plaintiff  that  should  deprive  it  of  its  remedy  for  the  mistake  into  which 
it  was  led  by  Burgess's  fraud. 

At  the  trial  before  a  single  judge,  the  defendant  contended  that  the 
remedy  of  the  plaintiff,  if  any,  was  not  against  the  defendant,  but  against 
the  Massachusetts  Loan  and  Trust  Company ;  and  that  the  plaintiff  got 
the  benefit  of  the  sale  of  the  sugar  by  applying  the  proceeds  on  another 
loan.  Neither  of  these  positions  is  tenable.  Where  a  party  who  has  paid 
money,  is  entitled  to  recall  it,  he  may  do  so,  provided  the  agent  has  not 
paid  it  over  to  the  principal,  and  that  no  change  has  taken  place  in  his 
situation  which  would  render  it  unjust  to  him.  The  fl\ct  that  the  agent 
has  passed  the  money  in  account  with  his  principal,  witliout  any  new  credit 
being  given  to  the  principal,  will  not  of  itself  be  sufl&cient  to  enable  the 
agent  to  retain  it.^ 

Nor  can  the  plaintiff  obtain  any  benefit  from  the  sale  of  the  sugar  by 
Burgess,  except  by  this  action,  which,  to  the  extent  to  which  it  is  maintained, 
will  i-estore  to  the  plaintiff  that  which  by  Burgess's  fi-aud  it  has  been  induced 
to  pay  out. 

The  question  remains,  how  much  the  plaintiff  is  entitled  to  recover.  By 
the  course  of  dealing  between  the  banks  composing  the  Clearing  House 
Association,  when  there  is  not  enough  money  on  deposit  to  pay  a  check 
in  full,  the  ordinary  custom  is  to  return  it  as  not  good.  This  custom  has 
no  application  to  the  inquiry  how  much  the  plaintiff  may  now  recover,  which 
is  one  outside  of  the  Clearing  House  rules.  These  were  not  complied  v/ith 
by  the  return  of  the  check  within  the  time,  and  cannot  control  in  deter- 
mining how  much  shall  be  returned  after  payment  of  it  has  been  made. 
If  no  mistake  had  been  made,  and  the  plaintiff  had  followed  the  custom,  it 
is  true  that  it  would  have  refused  the  check  entirely,  and  thus  have  kept 
in  its  control  the  other  funds  of  Burgess  &  Sons  not  the  subject  of  mistake, 
which  it  might  have  applied  in  offset  to  the  other  claims  which  it  held 
against  Burgess  &  Sons.  But  the  defendant  is  not  bound  to  indemnify  the 
plaintiff  against  all  the  incidental  consequences  of  its  mistake,  but  only  to 
return  that  money  which  was  the  subject  of  the  mistake.  So  far  as  Burgess 
&  Sons  were  entitled  to  draw,  the  defendant  has  now  a  right  to  hold.  The 
fact  that,  if  Burgess  &  Sons  had  overdrawn,  and  this  had  been  known  to 
the  plaintiff,  it  would  have  wholly  refused  the  check,  should  not  deprive 
the  defendant  of  that  which  it  was  the  duty  of  the  plaintiff  to  pay  him 

1  Story  on  Agency,  §  300. 


SECT.  l]  CKIPPS   V.    READE.  337 

upon  a  check  properly  drawn,  when  it  has  itself  honored  the  check  as  it 
was  actually  drawn.  The  plaintift'  bank  was  entitled,  if  it  saw  fit,  to  pay  the 
check  to  the  amount  actually  due  from  it  to  Burgess  tfc  Sons,  if  the  defend- 
ant was  willing  to  accept  that  sum.  To  this  Burgess  &  Sons  could  have 
made  no  objection. 

Nor  is  the  plaintiff  here  entitled  to  recover  any  money  to  the  use  of 
Burgess  k  Sons.  It  would  do  so  if  it  recovered  the  money  for  which 
Burgess  &  Sons  had  a  right  to  draw,  even  if,  when  recovered,  it  would  go 
to  the  use  of  Burgess  &  Sons  only  by  the  payment  of  their  other  debts  or 
liabilities  to  the  plaintiff  bank. 

The  money  which  was  the  subject  of  the  mistake  was  $7500.  In  the 
forenoon  of  September  4,  and  necessarily  before  the  check  of  the  defendant 
could  be  treated  as  paid,  three  checks,  together  amounting  to  $142;"),  were 
drawn  from  the  deposit  of  Burgess  &  Sons,  which  was  nominally  $17,145.40. 
These  two  sums  being  deducted  from  this  deposit,  there  remained  88220.46, 
for  which  Burgess  &  Sons  had  a  right  to  draw.  The  amount  which  the 
plaintiff  is  entitled  to  recover  is  the  difference  between  this  sum  and  $15,000, 
with  interest  from  the  date  of  the  writ. 

Judgment  accordingly. 


(e.)  Mistake  may  he  as  to  Title  of  Vendor. 

CEIPPS  V.  READE. 

In  the  King's  Bench,  April  15,  1796. 

[Reported  in  6  Term  Reports,  600. ] 

Assumpsit  for  money  had  and  received  to  recover  a  sum  of  forty  guineas, 
which  had  been  paid  by  the  plaintiff  to  the  defendant  for  the  purchase  of 
a  leasehold  estate.  Tiie  defendant  claimed  tlie  estate  in  question  as  ad- 
ministrator to  Mary  Bartlett,  who  had  taken  out  letters  of  administration 
to  her  husband,  the  former  possessor  of  the  estate,  under  tlie  name  of 
Caleb  Bartlett,  his  real  name  being  Carey  Bartlett.  On  the  sale  the  lease  it- 
self was  delivered  to  the  plaintiff,  but  there  was  no  assignment  or  other  con- 
veyance from  the  defendant ;  but  a  conversation  took  place  between  them 
in  which  the  latter  said  "that  the  premises  were  his  right  and  property  to 
do  as  he  liked  with,  and  if  anything  happened  he  would  sec  tlie  plaintiff 
righted."  Afterwards  John,  tlic  nephew  of  Carey  Bartlett,  took  out  admin- 
istration to  him  by  tlie  right  name,  and  recovered  possession  of  the  premises 
by  ejectment. 

It  was  contended  on  tlio  jiart  of  tiio  dufcMidant  at  the  tri;d,  1st,  that 
no  action  lay  to  recover  the  purchase-money,  on  the  authority  of  Jh-eo  v. 

22 


338  JOHNSON   V.    JOHNSON.  [CHAP.  II. 

Holbech,^  where,  under  circumstances  of  a  similar  nature  the  principle  of 
caveat  emptor  was  held  to  apply.  But  secondly,  if  any  action  could  be 
maintained,  it  could  only  be  on  the  special  warranty.  But  Lawrence,  J., 
before  whom  the  cause  was  tried  at  the  last  Oxford  assizes,  overruled  the 
objections,  and  directed  a  verdict  to  be  found  for  the  plaintiff,  with  liberty 
to  the  defendant  to  move  to  enter  a  nonsuit. 

Plumer  now  made  that  motion,  upon  the  grounds  mentioned  at  the 
trial.     But 

The  Court  refused  the  rule. 

Lord  Kenyon,  C.  J.  I  do  not  wish  to  disturb  the  rule  of  caveat  emptor 
adopted  in  Bree  v.  Holbech,  and  in  other  cases  where  a  regular  conveyance 
was  made,  to  which  other  covenants  were  not  to  be  added ;  for  in  general 
the  seller  only  covenants  for  his  own  acts  and  for  those  of  his  ancestor,  in 
■which  respect  the  case  of  a  mortgage  differs  from  it,  as  a  mortgagor  cove- 
nants that  at  all  events  he  has  a  good  title ;  but  here  the  whole  passed  by 
parol,  and  it  proceeded  on  a  misapprehension  by  both  parties  that  the 
defendant  was  the  legal  representative  of  the  lessee,  though  it  turned  out 
afterwards  that  he  was  not.  As  therefore  the  money  was  paid  under  a 
mistake,  I  think  that  an  action  for  money  had  and  received  will  lie  to 
recover  it  back ;  in  the  case  cited  no  action  at  all  could  have  been  main- 
tained. Rule  refused. 


JOSEPH  JOHNSON  v.  JOHN   JOHNSON. 

In  the  Common  Pleas,  May  31,  1802. 

[Reported  in  3  Bosanquet  Sf  Puller,  162.] 

Assumpsit  for  money  had  and  received. 

The  cause  was  tried  before  Heath,  J.,  at  the  summer  assizes  for  Warwick, 
1801,  and  the  plaintiff  was  nonsuited.  In  Michaelmas  term  following,  a 
rule  nisi  for  setting  aside  the  nonsuit  and  having  a  new  trial  was  obtained  ; 
but  afterwards,  at  the  desire  of  the  court,  it  was  agreed  that  a  special  case 
should  be  drawn  up,  the  material  facts  of  which  were  as  follows  :  — 

William  Johnson  of  Ptugby,  being  possessed  for  the  remainder  of  a  term 
of  1900  years  of  a  house  and  little  close  in  Rugby,  by  indenture  of  the 
2 2d  August,  1761,  in  consideration  of  an  intended  marriage  (afterwards 
solemnized)  between  himself  and  Anne  Langley,  assigned  the  above  premises 
to  John  Walker  and  Joseph  Johnson,  their  executors,  administrators,  and  as- 
signs, in  trust  to  permit  the  said  William  Johnson  to  enjoy  the  premises  for 
the  remainder  of  the  term  if  he  should  so  long  live ;  remainder  after  his 
death  to  his  intended  wife  for  her  life  ;  and  after  her  decease  upon  trust  to 
permit  and  suffer  the  heirs  of  the  body  of  the  said  Anne  Langley  by  the 

1  Douffl.  65i. 


SECT.  I.]  JOHNSON   V.    JOHNSON.  339 

said  William  Johnson  lawfully  begotten,  to  receive  the  rents  and  profits 
during  the  remainder  of  the  term  ;  and  in  default  of  such  issue,  to  permit 
the  executors,  administratoi-s,  and  assigns  of  the  said  William  Johnson  to 
receive  and  take  the  rents  and  profits  during  the  remainder  of  the  term. 
This  deed  also  contained  a  power  of  revocation  to  William  Johnson  and 
Anne  Langley  during  their  joint  lives.  William  Johnson  by  will,  dated 
the  12th  December,  1732,  devised  as  follows  :  ^'Item,  I  do  hereby  ratify  and 
confirm  the  settlement  of  my  house  in  Rugby,  wherein  I  now  live,  with  the 
close  and  appurtenances  thereto  belonging,  made  on  my  marriage  with  my 
present  wife  ;  and  subject  to  such  uses  as  are  contained  in  the  said  settle- 
ment, I  do  give  and  bequeath  all  my  reversion,  remainder,  and  interest  in 
the  same  premises  unto  Edward  Boddington,  Thomas  Walker,  Joseph  John- 
son (the  plaintiff),  and  Philip  Williams,  and  to  their  executors,  administra- 
tors, and  assigns,  in  trust  that  they  and  the  survivors,  etc.,  shall,  as  soon 
as  the  uses  in  the  said  settlement  shall  be  spent  and  executed,  or  otherwise 
ended  and  determined,  or  at  such  time  sooner  as  they  shall  think  proper, 
sell  and  dispose  of  my  said  reversion  and  remainder  in  the  same  premises  for 
the  best  price  or  prices  which  can  be  procured  for  the  same,  and  shall  pay 
and  dispose  of  the  monies  arising  from  such  sale  unto  and  amongst  all  and 
every  of  my  brothers'  and  sisters'  children  which  shall  be  surviving,  in 
equal  shares  and  proportions."  And  after  reciting  in  his  will  that  about 
tlie  time  of  the  inclosure  of  Rugby  fields  he  had  purchased  one  yard-land 
in  Rugby  for  the  remainder  of  a  term  of  3000  years,  and  that  on  the  late 
inclosure  thereof  there  was  awarded  to  him  in  lieu  thereof  a  plot  of  groinui 
containing  16  acres  3  roods  or  thereabouts,  and  that  he  (William  Johnson) 
borrowed  some  money  on  bonds  towards  paying  the  purchase  thereof,  he 
"gave  and  bequeathed  the  said  plot  of  ground,  with  the  appurtenances, 
unto  the  said  E.  B.,  T.  W.,  J.  J.,  and  P.  W.,  their  executors,  administrators, 
and  assigns,  for  the  residue  and  remainder  of  the  said  term,  in  trust  that 
they  should  out  of  the  rents  and  profits,  and  by  mortgage  of  the  said  plot 
of  ground,  raise  the  said  principal  money  and  interest  which  should  be  owing 
on  the  said  bonds,  and  pay  the  same  in  discharge  of  the  said  bonds,  and 
subject  to  such  charge  so  to  be  made  on  the  said  lands,  in  trust  to  permit 
and  suffer  the  rents  and  profits  of  the  same  plot  of  ground  to  be  received 
by  his  wife  Anne  Johnson  until  his  son  Thomas  Johnson  should  attain  21  ; 
and  as  soon  as  he  should  attain  21,  in  trust  to  permit  and  suftbr  the  rents 
and  profits  thereof  to  be  received  by  him  during  his  life ;  and  after  his 
decease,  in  case  his  son  should  leave  any  children,  in  trust  for  them  ;  but 
in  case  he  left  no  child,  V)ut  left  a  widow,  then  in  trust  that  the  rents 
should  be  paid  to  her  for  life  ;  and  after  the  decease  of  his  son's  children 
and  widow,  in  trust  for  his  (the  testator's)  wife  for  life  ;  and  after  her 
decease,  in  trust  to  sell  and  dispose  of  the  said  plot  of  l;uid  for  the  best 
price  which  coidd  be  jjot  for  the  same,  and  to  pay  and  dispose;  of  the  money 
arising  from  such  sale  unto  and  amongst  all  and  every  of  his  (the  testator's) 


340  JOHNSON   V.   JOHNSON.  [CHAP.  II. 

brothers'  and  sisters'  childreu  which  should  be  then  living,  ir.  aqual  shares 
and  proportions."  William  Johnson  appointed  his  wife  Anne  Johnson 
sole  executrix  of  his  will,  and  died  in  1784,  without  having  altered  it.  In 
1788,  his  widow  Anne  Johnson  died,  leaving  the  testator's  son,  Thomas 
Johnson,  her  surviving;  and  in  1791,  the  said  Thomas  Johnson,  the  son, 
died  a  bachelor  and  intestate,  aged  26  years.  Upon  the  death  of  the  widow 
and  son  of  William  Johnson,  the  testator,  without  issue,  the  trustees  entered 
into  possession  of  the  trust  premises,  and  were  about  to  sell  them,  when 
Joseph  Johnson  (the  plaintiti'),  one  of  the  trustees,  and  also  one  of  the 
legatees,  being  desirous  to  purchase,  application  was  made  to  his  co-trustees, 
as  also  to  the  different  legatees  (being  23  in  number  besides  himself),  to  know 
the  terms  on  which  the  premises  were  to  be  sold,  and  it  was  finally  agreed 
ty  the  trustees  and  by  all  the  legatees  (witnessed  by  a  memorandum  in 
writing  to  that  effect,  and  signed  by  them,  including  the  defendant  who 
was  one  of  the  legatees)  to  sell  the  house  for  300/.  and  the  land  for  700/., 
each  being  distinctly  valued.  This  sum  the  plaintiff  agreed  to  give,  and 
the  following  articles  were  in  consequence  prepared  :  "  Be  it  remembered 
that  it  is  this  day  agreed  between  Edward  Boddington  of  etc.,  Philip  Wil- 
liams of  etc.,  and  Thomas  Walker  of  etc.,  and  Joseph  Johnson  of  etc.,  as 
follows :  to  wit,  the  said  E.  B.,  V.  W.,  and  T.  W.,  do  hereby  agree  that  they 
will,  at  their  expense,  on  or  before  Old  Ladj'-day  next,  make  out  a  good 
title  to,  and  by  conveyances  and  assignments,  to  be  prepared  at  the  costs 
of  the  said  Joseph  Johnson,  grant  and  assign  unto  the  said  Joseph  Johnson, 
his  heirs,  executors,  administrators,  or  assigns,  or  as  he  or  they  shall  direct. 
All  that  messuage  or  tenement,  outbuildings,  backside,  and  appurtenances 
to  the  same  belonging,  situate  in  Rugby  aforesaid,  now  in  the  occupation 
of  Mr.  W.  L. ;  and  also  all  that  allotment  of  land  lying  in  the  fields  of 
Rugby  aforesaid,  containing  16  acres  and  three  roods  or  thereabouts,  now  in 
the  occupation  of  Mr,  S.  D.,  together  with  all  rights,  etc.  :  In  consideration 
whereof,  the  said  Joseph  Johnson  doth  agree  that  he  will  pay  or  cause  to 
be  paid  unto  the  said  E.  B.,  P.  W.,  and  T.  W.,  at  the  time  above  limited, 
the  sum  of  1000/.  as  and  for  the  purchase-money  for  the  said  premises," 
Then  followed  some  stipulations  in  favor  of  the  purchaser,  but  not  material 
to  be  stated  :  and  the  articles  were  signed  by  Edward  Boddington,  Philip 
AVilliams,  Thomas  Walker,  and  Joseph  Johnson.  In  pursuance  of  the  above 
contract,  the  title  deeds  were  delivered  to  the  plaintiff's  attorney,  by  whom 
an  assignment  of  the  land  was  pi'epared  from  the  niortgagee  and  the  parties 
interested,  which  was  executed  by  Edward  Boddington  and  Philip  Williams, 
but  not  by  Thomas  Walker,  the  other  trustee,  or  any  other  person.  An 
indenture  of  assignment  of  the  house  and  premises  in  Rugby  was  also 
prepared,  to  which  the  four  trustees  were  made  parties  of  the  first  part ; 
Job  Walker  and  Lucy  his  wife,  and  Samuel  Walker  and  Elizabeth  his  wife, 
(the  said  Lucy  and  Elizabeth  being  surviving  acting  executrixes  of  John 
Walker  who  survived  Joseph  Johnson,  his  co-trustee,  in  the  trust  created 


SECT.  I.]  JOHNSON   V.   JOHNSON.  341 

by  the  deed  of  the  22d  of  August,  17G1),  of  the  second  part;  and  one 
J.  B.  of  the  third  part;  and  it  was  therein  witnessed  that  the  said  Edward 
Boddiugton,  Thomas  Walker,  and  Philip  Williams,  at  the  request  of  Joseph 
Johnson  (the  plaintitl),  and  the  said  J.  W.  and  Lucy  his  wife,  and  S.  W. 
and  Elizabeth  his  wife,  assigned  to  J.  B.  as  trustee  for  Joseph  Johnson  (the 
plaintitf)  the  remainder  of  the  term  of  1900  yours  in  the  house  and  premises 
in  Kugby.  This  deed  was  executed  by  E.  B.  and  P.  W.,  two  of  the  trustees, 
but  by  no  otlier  person.  On  the  17th  of  April,  1792,  a  meeting  of  the 
legatees  was  holden,  at  which  the  plaintiff  and  Philip  Williams,  one  of 
the  trustees,  attended,  and  the  purchase-money  was  then  divided  among 
the  legatees  according  to  their  respective  shares.  The  defendant  received 
his  share,  amounting  to  29/.,  and  signed  a  paper  acknowledging  his  receipt 
from  the  four  trustees  of  his  share,  and  discharging  them  and  the  estate. 
At  the  Lent  assizes,  1797,  at  Warwick,  a  Mrs.  Sutton,  who  was  the  aunt 
and  next  of  kin  of  the  testator's  son,  Thomas  Johnson,  recovered  from  the 
plaintiff  the  house  ami  premises  situate  in  Rugby,  by  ejectment,  and  after- 
wards obtained  a  verdict  for  the  mesne  profits  thereof,  amounting  to  74/.  5s. 
Upon  this  event  taking  })lace,  eighteen  out  of  the  twenty -four  legatees  paid 
back  to  the  plaintiff  their  several  proportions  of  the  money  received  by  them 
on  the  sale  of  the  house  and  premises  to  the  phuniilT;  but  the  defendant 
and  five  others  refusing  to  do  the  same,  the  present  action  was  commenced  in 
order  to  determine  the  (jiiestion.  The  plaintiff  is  still  in  possession  of  the 
plot  of  land  in  Pugby  liclds  (upon  which  lie  has  expended  a  considerable 
sura  of  money  in  building,  drainage,  and  other  improvements),  being  part 
of  the  premises  purchased  for  the  said  sum  of  1000/.,  under  the  aforesaid 
agreement  entered  into  between  him  and  the  other  trustees,  and  receives 
annually  the  rents  and  profits  thereof,  amounting  to  35/.  14s.,  to  his  own 
use  ;  and  on  application  made  to  him  on  the  part  of  the  defendant,  refuses 
to  relinquish  the  purchase  of  the  plot  of  land,  and  to  resell  the  same  for 
the  parties  interested  under  the  testator's  will. 

The  question  for  t:  ••  opinion  of  the  court  was.  Whether  an  action  for 
money  had  and  reci  1  was  maintainable  by  the  plaintiff  against  the 
defendant  under  the  iliove  circumstances'?  If  so,  tlien  a  verdict  to  be 
entered  for  the  plaint  iii';  but  if  the  court  should  be  of  a  contrary  opinion, 
then  a  verdict  to  be  cincred  for  the  defendant. 

Vanr/hrui,  Scijt,,  fo:   the  plaintiff. 

Ikiylei/,  Serjt.,  for  ti.c  defendant.  Tiie  plaintilV  is  not  entitled  to  recover 
back  the  money  which  he  has  paid,  from  any  person  ;  but  if  he  bo  entitled, 
to  recover  it  back,  still  he  cannot  recover  it  from  the  present  defendant,, 
nor  in  this  form  of  ac);..n.  There  is  no  fraud  in  this  eii.se,  and  therefore 
the  rule  of  caveat  eir:  r  must  prevail  as  laid  down  in  I'ree  v.  Ilolbcch. 
Indeed  the  proper  rcuMdy  for  tlie  plaintiff  to  adopt  is  to  sue  the  three 
trustees,  who  by  the  ::.rticlc  entered  into  in  1791  covenanted  to  convey. 
[Lord  Ai.v.WLKV,  (.!.  .!       if  he  were  to  sue  on  that  article  lie  would  recover 


342  joiixsoN  V.  joiLxsoN.  [chap.  II. 

Is.  damao-es  iu  a  court  of  law,  and  a  court  of  equity  would  uot  compel  the 
trustees  to  convey  that  to  which  they  had  no  title.]  The  case  of  Cripps  v. 
Kead  is  distinguishable  from  the  present,  because  there  the  action  was 
brought  against  the  very  party  who  had  sold  the  property  as  well  as  received 
the  money,  and  the  sale  rested  merely  on  a  parol  undertaking,  and  not  as 
in  this  case  on  an  article  executed  by  those  in  whom  the  right  to  convey 
was  supposed  to  be.  But  at  all  events  the  present  defendant  is  not  liable 
to  be  sued,  for  the  contract  of  sale  and  the  covenant  to  convey  was  made 
by  the  trustees  with  the  plaintiff,  and  the  defendant  was  no  party  to  that 
contract.  The  rule  therefore  applies  that  where  an  express  contract  between 
the  plaintiff  and  other  parties  is  proved,  the  court  will  not  imply  a  contract 
between  the  plaintift"  and  defendant  respecting  the  same  subject-matter. 
Indeed  the  only  way  in  which  the  legatees  were  concerned  in  the  transaction 
was  in  giving  their  consent  to  what  the  trustees  thought  fit  to  do.  Nor  is 
this  the  proper  form  of  action  to  recover  the  money  which  has  been  paid, 
for  the  special  contract  is  not  rescinded,  and  till  that  is  done  the  action  for 
money  had  and  received  cannot  be  sustained.  That  the  contract  is  not 
rescinded  appears  from  the  plaintiff  still  retaining  part  of  his  purchase ; 
now  as  the  sale  of  the  whole  was  entire,  the  plaintiff  is  not  at  liberty  to 
rescind  the  contract  iu  pai-t  and  consider  it  as  still  subsisting  as  to  the 
remainder.  Had  this  property  been  sold  in  parcels  and  by  two  distinct 
contracts,  possibly  a  very  different  price  would  have  been  demanded  and 
paid.  The  action  is  altogether  novel,  being  an  attempt  to  sue  legatees  in 
a  court  of  law,  and  to  recover  part  of  the  money  paid  under  a  special  con- 
tract, by  treating  that  contract  as  rescinded  in  part. 

The  opinion  of  the  court  was  this  day  delivered  by 

Lord  Alvanley,  C.  J.,  who  after  stating  the  case  proceeded  thus: — - 
The  premises  out  of  which  the  present  dispute  arises  were,  together  with 
the  plot  of  land  in  Rugby  field,  purchased  by  the  plaintiff  for  the  gross 
eum  of  1000/.  ;  but  it  is  to  be  remembered  that  the  house  in  Rugby  and 
the  plot  of  land  in  Rugby  field  were  each  distinctly  valued,  the  former  at 
the  sum  of  300/.  and  the  latter  at  the  sum  of  700/. ;  and  upon  those  distinct 
valuations  that  contract  was  entered  into  which  was  afterwards  reduced 
into  the  form  of  an  agreement,  and  that  deed  of  agreement  was  prepared 
which  was  executed  by  two  only  of  the  trustees,  and  by  no  other  person. 
The  contract  having  been  thus  far  caiTied  into  execution,  it  was  discovered 
that  the  limitation  to  the  representatives  of  the  settlor  in  the  deed  of  1761 
was  too  remote,  in  consequence  of  which  an  ejectment  was  brought  by  the 
person  entitled,  and  the  plaintiff,  who  had  paid  the  money,  but  to  whom 
no  legal  conveyance  had  been  made,  was  evicted  from  the  possession.  The 
flaw  therefore  being  discovered  before  the  purchase  was  completed,  there  is 
no  pretence  to  say  that  the  plaintiff  had  bought  the  estate,  and  that  having 
obtained  the  title  for  which  he  contracted,  he  must  abide  by  the  consequences. 
The  plaintiff",  upon  being  evicted,  was  obliged  to  refund  the  rents  and  profits, 


SECT.  L]  JOHNSON   V.   JOHNSON.  343 

and  several  of  the  persons  interested  consented  to  repay  their  proportions 
of  the  purchase-money ;  but  some  (among  whom  is  the  present  defendant) 
have  refused ;  and  the  question  now  is,  whether  under  these  circumstances 
the  plaiutiif  be  entitled  to  recover  against  the  defendant  in  an  actiou  for 
money  had  and  received  ]  My  Brother  Heath  nonsuited  the  plaintiff  at 
the  trial,  on  the  idea  that  the  object  of  the  action  was  to  call  upon  a  legatee 
to  refund  a  legacy  ;  a  matter  which  he  thought  could  only  be  agitated  in  a 
court  of  equity.  It  turns  out  however  that  this  is  not  an  action  for  repay- 
ment of  a  legacy.  If  such  had  been  the  object  of  the  action,  I  agree  that 
it  could  not  have  been  maintained.  If  an  executor,  thinking  that  he  has 
settled  the  affairs  of  his  testator,  pay  the  legacies,  I  have  no  difficulty  in 
saying  that  a  court  of  common  law  would  not  entertain  an  action  for  money 
had  and  received  against  a  legatee,  since  such  a  court  cannot  take  into 
consideration,  as  a  court  of  equity  would  do,  the  mode  in  which  the  funds 
might  have  been  applied.  In  the  case  of  Moses  v.  Macferlan,^  some  princi- 
ples were  laid  down,  which  are  cei-tainly  too  large,  and  which  I  do  not  mean 
to  rely  on;  such  as  that,  wherever  one  man  has  money  which  another  ought 
to  have,  an  action  for  money  had  and  received  may  be  maintained ;  or  that 
wherever  a  man  has  an  equitable  claim  he  has  also  a  legal  action.  I  agree 
with  the  opinion  of  my  Lord  Chancellor  in  the  case  of  Cooth  v.  Jackson,* 
where  he  expresses  his  doubt  whether  the  courts  of  law  have  not  gone  too 
far  in  the  discussion  of  equitable  rights,  since  they  cannot  administer  equity 
in  the  same  way  as  courts  of  equity  do ;  and  shows  that  great  injustice 
may  arise  from  suffering  a  plaiutifi"  to  prevail  in  a  court  of  law,  whereas, 
if  he  were  obliged  to  seek  his  remedy  in  a  court  of  equity,  much  would 
also  be  provided  in  the  defendant's  favor.  No  man  therefore  is  more  dis- 
posed to  be  cautious  in  admitting  equitable  matters  to  be  agitated  in  a 
court  of  law  than  myself.  But  as  this  is  not  a  case  between  an  executor 
and  a  legatee,  in  which  the  former  seeks  to  recover  the  amount  of  any 
legacy  paid  to  the  latter,  but  between  the  purchaser  and  vendor  of  an  estate, 
my  difficulty  has  been  how  far  the  agreement  is  to  be  considered  as  one 
contract  for  the  purchase  of  both  sets  of  premises,  and  how  far  the  party 
can  recover  so  much  as  he  has  paid  by  way  of  consideration  for  the  part 
of  which  the  title  has  failed,  and  retain  ti>e  other  part  of  tlie  bargain. 
This  for  a  time  occasioned  doubts  in  my  mind;  fur  if  the  latter  (jucstion 
were  involved  in  this  case  it  would  be  a  question  for  a  court  of  equity.  If 
the  question  were  how  far  the  })articular  i)art,  of  which  the  title  has  failed, 
formed  an  essential  ingredient  of  the  bargain,  the  grossest  injustice  would 
ensue  if  a  party  were  suffered  in  a  court  of  law  to  say  that  he  would  retain 
all  of  which  the  title  was  good,  and  recover  a  proportionable  part  of  the 
purchase-money  for  the  rest.  Possibly  the  part  which  he  retains  might 
not  have  been  sold  unless  the  other  part  had  been  taken  at  the  sanie  time, 
and  ought  not  to  be  valued  in  projiortion  to  its  extent,  but  according  to 
1  2  burr.  1005.  =*  6  Vcs.  Jun.  39. 


344  YOUNG  V.    COLE.  [CHAP.  II. 

the  various  circumstauces  connected  with  it.  But  a  court  of  equity  may- 
inquire  into  all  the  circumstances,  and  may  ascertain  how  far  one  part  of 
the  bargain  formed  a  material  ground  for  the  rest,  and  may  award  a  com- 
pensation according  to  the  real  state  of  the  transaction.  In  this  case 
however  no  such  question  ai-ises ;  for  it  appears  to  me  that  although  both 
pieces  of  ground  were  bargained  for  at  the  same  time,  we  must  consider 
the  bargain  as  consisting  of  two  distinct  contracts ;  and  that  the  one  part 
was  sold  for  300^.  and  the  other  for  7001.  It  has  not  been  suggested  that 
they  were  necessary  to  the  occupation  of  each  other.  It  amounts  therefore 
to  no  more  than  this :  that  the  plaintiff,  being  one  of  the  executors  who 
were  about  to  sell  the  house,  and  also  to  sell  the  land,  to  both  of  which 
the  legatees  undertook  to  make  a  good  title,  advanced  his  money  to  the 
legatees  on  the  purchase  of  those  two  lots,  and  now  seeks  to  recover  back 
the  money  for  one  of  them,  because  the  title  to  that  has  proved  defective. 
We  by  no  means  wish  to  be  understood  to  intimate  that  where  under  a 
contract  of  sale  a  vendor  does  legally  convey  all  the  title  which  is  in 
him,  and  that  title  turns  out  to  be  defective,  the  purchaser  can  sue  the 
vendor  in  an  action  for  money  had  and  received.  Every  purchaser  may 
protect  his  purchase  by  proper  covenants;  where  the  vendor's  title  is  act- 
ually conveyed  to  the  purchaser  the  rule  of  caveat  emj^tor  applies.  In  the 
present  case  the  plaintiff  never  has  had  any  title  conveyed  to  him,  and 
therefore,  we  are  of  opinion,  notwithstanding  the  party  sued  is  a  legatee, 
that  the  plaintiff  has  paid  his  money  under  a  mistake,  consequently  the 
rule  adopted  in  com-ts  of  law  in  such  cases  applies  to  him,  and  entitles  him 
to  recover  that  money  from  the  party  to  whom  it  has  been  paid,  in  an  action 
for  money  had  and  received. 

Judgment  for  the  plaintiff. 


yOUN"G   V.    COLE.^ 

In  the  Common  Pleas,  April  29,  1837. 

[Reported  in  3  Binghairi's  New  Cases,  724.] 

Action  for  money  paid  by  the  plaintiff  to  the  use  of  the  defendant,  and 
for  money  had  and  received  by  the  defendant  to  the  use  of  the  plaintiff. 

The  plaintiff,  a  stockbroker,  was  employed  by  the  defendant  in  April, 
183G,  to  sell  for  him  four  Guatemala  bonds,  of  254^.  each. 

The  plaintiff,  in  three  or  four  days,  sold  them  to  Briant  for  300^.,  and 
deducting  1/.  5s.  for  his  commission,  paid  the  defendant  298/.  I5s. 

Briant,  who  was  conversant  with  the  usages  of  the  Stock  Exchange,  kept 
the  bonds  two  days,  and  then  sold  them  again. 

1  Tliis  case  should  have  been  inserted  in  the  subdivision  immediately  following.  —  Ed. 


SECT.  I.]  YOUNG   V.    COLE.  343 

The  bonds  in  question  were  not  stamped.     But, 

In  1829  the  Guatemala  government  had  issued  an  order,  which  waa 
advertised  in  the  Loudon  newspapers,  requiring  the  holders  of  such  bonds 
to  produce  thera,  and  have  them  stamped  by  an  agent  of  that  government 
within  a  certain  time ;  in  defiiult  of  which  they  would  not  be  recognized 
by  the  state.  Evidence  of  the  advertisement  was  offered  and  rejected  ;  but 
it  was  proved  that  since  that  time,  unstamped  Guatemala  bonds  were  not 
a  marketable  commodity  on  the  Stock  Exchange. 

Upon  that  gi'ound,  Briant's  vendee  soon  returned  the  bonds  in  question. 
Briant,  representing  the  matter  to  the  plaintiff,  the  plaintiff,  without  com- 
municating with  the  defendant  or  returning  the  bonds,  refunded  wliat 
Briant  had  paid  him,  and  now  sought  to  recover  the  amount  which  he  had 
himself  paid  over  to  the  defendant. 

The  defendant,  upon  being  applied  to,  wrote  to  say  that  he  was  agent 
only  as  to  a  part  of  the  bonds ;  but  that,  if  the  payment  had  been  mado 
for  his  own  part,  he  would  desire  his  clerk  to  reimburse  the  plaintiff.  At 
the  trial  he  did  not  show  that  all  the  bonds  were  not  his. 

The  plaintiff  could  find  no  one  in  this  country  who  had  authority  now  to 
stamp  the  bonds ;  but  one  witness  said  he  had  procured  a  stamp  to  bonds 
of  the  same  description. 

Both  parties,  at  the  time  of  the  transaction,  were  ignorant  that  a  stamp 
was  necessary.  It  was  proved  that  brokers  on  the  Stock  Exchange  do 
business  as  principals,  in  dealing  with  foreign  stock,  and  are  liable  to  be 
expelled  if  they  do  not  make  good  their  differences.  The  defendant's  name 
•was  not  mentioned  by  the  plaintiff  to  Briant, 

On  behalf  of  the  defendant,  it  was  objected  at  the  trial  before  Tixdal,  C.  J., 
that  under  these  circumstances  the  plaintifl'  could  not  recover  on  the  decla- 
ration for  money  paid  or  money  had  and  received  ;  but  should  have  de- 
clared .specially  on  the  implied  warranty  by  the  defendant  that  the  bonds 
he  offered  for  sale  were  marketable  bonds.     "Whereupon, 

A  verdict  was  taken  for  the  plaintiff  for  the  amount  the  defendant  had 
received  from  him ;  with  leave  for  the  defendant  to  move  to  set  the  verdict 
aside  and  enter  a  nonsuit  instead. 

Sir  /''.  Pollock  accordingly  moved  the  court  to  that  effect,  urging,  that 
after  Briant  had  kept  the  bonds  for  a  length  of  time  sufficient  to  enable 
him  to  decide  whether  he  would  make  thcin  his  own  or  not,  and  had  act- 
ually sold  them  to  a  tliird  person,  the  plaintiff  had  no  riglit  to  call  on  the 
defendant  for  a  payment  which  the  plaintiff  was  not  compellable  to  make; 
at  all  events,  not  unless  he  had  api)rised  the  defendant  of  what  he  was 
about  to  do,  and  had  returned  the  bonds  so  as  to  have  aUbrdcd  the  defend- 
ant the  opportunity  of  replacing  them  with  stamped  instruments.  In  Street 
V.  Blay  '  it  was  held,  that  a  person  who  had  purchased  a  hoj-se  warranted 
sound,  Bold  it  again,  and  then  repurchased  it,  could  not,  on  discovering 

»  2  15.  k  Ad.  150. 


346  YOUNG   V.    COLE.  [CHAP.  11. 

that  the  horse  was  unsound  when  first  sold,  require  the  original  vendor  to 
take  it  back  again ;  nor  could  he  by  reason  of  the  unsoundness,  resist  an 
action  by  such  vendor  for  the  price. 

Wilde,  Serjt.,  and  Offle  showed  cause. 

F.  Robinson  in  support  of  the  rule. 

TiNDAL,  C.  J.  It  appears  to  me,  that  the  sum  for  which  the  verdict  has 
been  given  is  properly  called  money  received  by  the  defendant  to  the  use 
of  the  plaintiff.  The  money  which  the  plaintiff  delivered  to  the  defendant 
was  his  own  money,  for  he  had  sold  the  bonds  as  a  principal  to  Briant,  and 
was  subject  to  all  the  responsibilities  of  a  principal.  He  delivered  the 
money  to  the  defendant  on  an  understanding  that  the  bonds  he  had  re- 
ceived from  the  defendant  were  real  Guatemala  bonds,  such  as  were  sal- 
able on  the  Stock  Exchange.  It  seems,  therefore,  that  the  consideration 
on  which  the  plaintiff  paid  his  money  has  failed  as  completely  as  if  the 
defendant  had  contracted  to  sell  foreign  gold  coin  and  had  handed  over 
counters  instead.  It  is  not  a  question  of  warranty ;  but  whether  the  de- 
fendant has  not  delivered  something  which,  though  resembling  the  article 
contracted  to  be  sold,  is  of  no  value. 

The  remaining  question  is,  whether  the  plaintiff  had  a  right  to  rescind 
the  contract  he  had  entered  into  with  Briant.  It  is  to  be  observed  that  in 
that  contract  the  defendant's  name  was  never  used  ;  there  was  no  contract 
between  him  and  Briant ;  the  plaintiff  was  the  only  person  known  to  Briant. 
But  stopping  short  of  that,  the  universal  custom  of  the  Stock  Exchange 
would  authorize  the  plaintiff  to  rescind  the  contract  without  consulting  the 
defendant ;  and  the  defendant  has  been  in  no  respect  damaged  by  what 
the  plaintiff  has  done. 

There  is,  however,  another  ground  on  whicli  the  verdict  stands  clear  of 
objection  ;  that  is,  that  after  the  defendant  was  aware  of  all  that  had  been 
done,  he  wrote  to  say  that  if  the  bonds  were  his  own,  he  would  send  his 
clerk  to  pay  the  plaintiff  the  amount.  Having  omitted  at  the  trial  to  show 
that  he  held  them  in  the  capacity  of  agent,  as  he  had  asserted,  his  letter 
is  a  ratification  of  what  the  plaintiff  had  done,  and  the  verdict  ought  not 
to  be  disturbed. 

Park,  J.,  concurred. 

BoSANQUET,  J.  I  agree  in  the  principle  of  the  cases  which  have  been 
cited  as  to  breach  of  warranty,  but  this  is  not  a  case  of  that  description. 
Here,  no  consideration  has  been  given  for  the  money  received  by  the 
defendant :  the  bonds  he  delivered  to  the  plaintiff  were  not  Guatemala 
bonds,  but,  on  the  Stock  Exchange,  worthless  paper ;  and  the  payment 
made  by  the  plaintiff  to  Briant  was  not  voluntary.  According  to  the  prin- 
ciple established  by  Child  v.  Morley,  the  defendant  was  bound  to  reimburse 
the  plaintiff  what  he  was  thus  compelled  to  pay.  For  it  appeared  to  be  the 
custom  of  the  Stock  Exchange,  that  in  these  cases  the  broker  is  treated 
as  principal,  and  liable  to  be  expelled  if  he  does  not  make  good  his  differ- 


SECT.  I.]  MORLEY   V.    ATTENBOROUGH.  347 

ences.  Upon  either  of  the  counts,  therefore,  the  plaintiff  may  sustain  this 
action.  And  even  upon  the  defendant's  letter,  unless  he  showed  the  bonds 
not  to  have  been  his  own,  the  plaintiff'  is  entitled  to  retain  the  verdict. 

CoLTMAN,  J.  I  am  of  the  same  opinion.  The  first  question  is,  whether 
the  plaintiff  was  entitled  to  rescind  the  contract  with  Briant ;  and  I  am 
of  opinion  he  was.  The  bonds  which  he  had  sold  at  the  defendant's  re- 
quest were  not  Guatemala  bonds,  in  the  sense  of  the  Stock  Exchange. 
Therefore,  even  considering  the  plaintiff  only  as  agent,  when  he  received 
authority  from  the  defendant  to  sell  the  bonds  he  received  an  imjilied 
authority  to  act  as  all  brokers  do  upon  similar  occasions ;  that  is,  to  re- 
scind the  contract  if  the  article  delivered  turns  out  not  to  be  the  article 
sold.  J^u/e  ducharged. 


MORLEY  V.   ATTENBOROUGH. 
In  the  Exchequer,  February  17,  1849. 

[Reported  in  3  Exchequer  Reports,  500.] 

Assumpsit.  The  first  count  of  the  declaration  stated,  that  in  considera- 
tion that  the  plaintiff  would  buy  of  the  defendant  a  harp  for  15/.  155.,  the 
defendant  promised  that  he  had  lawful  right  and  title  to  sell  it  to  the 
jilaintiff,  that  the  plaintiff  bought  the  harp  and  paid  for  the  same.  Breach, 
tliut  the  defendant  had  not  lawful  right  or  title  to  sell  the  harp.  There 
was  also  a  count  for  money  had  and  received  to  the  ])laintifi''s  use.  Plea, 
no7i  assumpsit. 

At  the  trial,  before  Platt,  B.,  at  the  Middlesex  sittings  after  Easter 
term,  1847,  the  following  facts  appeared  :  —  In  the  year  1839,  a  person  of 
the  name  of  Poley,  having  hired  a  harp  of  Messrs.  Chappcll,  music-sellers, 
j.ledgcd  it  with  the  defendant,  a  pawnbroker,  for  15/.  15s.,  on  the  terms 
that,  if  the  sum  advanced  were  not  repaid  within  six  months,  the  defendant 
should  be  at  liberty  to  sell  it.  The  defendant  had  no  knowledge  tiiat  the 
harp  did  not  belong  to  the  party  pledging  it.  The  harp  not  having  been 
redeemed  at  the  stipulated  time,  the  defendant,  in  the  year  1845,  sent  it 
with  other  articles  to  be  sold  by  public  auction.  Tlie  auctioneers  were 
accustomed  to  have  quarterly  sales  of  unredeemed  pledges,  of  which  the 
present  sale  was  one,  and  on  those  occasions  were  in  the  habit  of  putting 
other  lots  into  the  sale.  The  sale  extended  over  several  days,  aud  a  gen- 
eral catalogue,  comprising  the  articles  to  be  sold  on  each  day,  stated  on 
the  titlepage,  that  the  goods  for  sale  consisted  of  "a  colk^ction  of  for- 
feited property,  reserved,  agreeably  to  Act  of  rrtrhametit,  for  quarterly  sale,^ 
pledged  prior  to  May,  1844,"  with  certain  pawnbrokers  (naming  them,  nnd 
1  See  39  &  10  Geo.  3,  c.  Kit,  §  18. 


3i8  MOKLEY  V.   ATTENBOROUGIL  [CHAP.  II. 

amongst  others  the  defendant),  and  that  the  lots  without  numbers  were 
"other  effects."  Catalogues  were  also  printed,  applicable  to  each  day's 
sale.  The  harp,  which  was  numbered  in  the  catalogue,  was  knocked  down 
to  the  plaintiff  for  15^.  15s.,  but  no  warranty  of  title  was  given.  The 
]\Iessrs.  Chappell,  having  afterwards  discovered  that  the  harp  was  in  tlje 
plaintiff's  possession,  commenced  an  action  against  him  for  its  I'ecovery, 
whereupon  the  plaintiff  gave  up  the  harp  to  them,  and  paid  the  costs,  for 
which,  together  with  the  price  of  the  harp,  the  present  action  was  brought. 
On  behalf  of  the  defendant  it  was  objected,  that  there  was  no  warranty  of 
title,  either  express  or  implied,  and  that  the  plaintiff  ought  to  be  nonsuited. 
The  learned  judge  directed  a  verdict  for  the  plaintiff,  reserving  leave  for 
the  defendant  to  move  to  enter  a  nonsuit. 

Martin  having  obtained  a  rule  nisi  accordingl}', 

HumjyhreT/  and  Bovill  showed  cause  in  last  Easter  term  (May  11).  The 
question  is,  whether,  on  the  sale  of  a  personal  chattel,  the  law  implies  a 
warranty  by  the  vendor  that  he  has  good  title  to  the  thing  sold.  Some 
authorities  certainly  appear  to  militate  against  that  proposition.  Sprigwell 
V.  Allen ^  was  "an  action  upon  the  case,  for  falsely  and  fraudulently  selling 
a  horse  to  the  plaintiff,  as  the  proper  horse  of  the  defendant,  ^lh^  revera 
it  was  the  horse  of  Sir  J.  L.,  because  the  plaintiff  could  not  j)rove  that 
the  defendant  knew  it  not  to  be  his  own  horse  (for  the  declaration  must 
be  that  he  did  it  fraudulently  or  knowing  it  to  be  not  his  own  horse) ; 
for  the  defendant  bought  the  horse  in  Smithfield,  but  not  legally  tolled  ; 
the  plaintiff  was  nonsuit."  ^  Also,  it  is  said,^  "  If  I  take  the  horse  of 
another  man,  and  sell  him,  and  the  owner  take  him  again,  I  may  have 
an  action  of  debt  for  the  money ;  for  the  bargain  was  perfect  by  the  de- 
livery of  the  horse,  and  caveat  emiJtorr  Chandelor  v.  Lopus^  was  an  "ac- 
tion upon  the  case,  whereas  the  defendant,  being  a  goldsmith,  and  having 
skill  in  jewels  and  precious  stones,  had  a  stone  which  he  affirmed  to 
Lopus  to  be  a  bezar  stone,  and  sold  it  to  him  for  100/.,  uhi  revera  it  was 
not  a  bezar  stone.  The  defendant  pleaded  not  guilty,  and  verdict  was 
given  and  judgmeiat  entered  for  the  plaintiff  in  the  King's  Bench.  But 
error  was  thereof  brought  in  the  Exchequer  Chamber,  because  the  declara- 
tion contains  not  matter  sufficient  to  charge  the  defendant,  viz.,  that  he 
warranted  it  to  be  a  bezar  stone,  or  that  he  knew  that  it  was  not  a  bezar 
stone ;  for  it  may  be  that  he  himself  was  ignorant  whether  it  were  a  bezar 
stone  or  not ;  and  all  the  Justices  and  Barons  (except  Anderson)  held,  that 
for  this  cause  it  was  error;  for  the  bare  affirmation  that  it  was  a  bezar 
stone,  without  warranting  it  to  be  so,  is  no  cause  of  action ;  and  although 
he  knew  it  to  be  no  bezar  stone,  it  is  not  material ;  for  every  one  in  selling 
wares  will  affirm  that  his  wares  are  good,  or  the  horse  which  he  sells  is 
sound  ;  yet  if  he  does  not  warrant  them  to  be  so,  it  is  no  cause  of  action." 

1  Aleyii,  91.  2  geg  Williamson  v.  Allison,  2  East,  448,  note. 

8  Noy  Max.  Bytliewood's  Ed.  209.       *  Cro.  Jac.  4. 


SECT.  I.]  MOKLEY   V.   ATTENBOROUGII.  349 

There,  however,  the  affirmation  was  as  to  the  quality,  not  the  title  of  the 
tiling  sold.     In  Early  v.  Garrett,^  Littledale,  J.,  says,  "  It  has  been  held, 
that  where  a  man  sells  a  horse  as  his  own,  when  in  truth  it  is  the  horse 
of  another,  the  purchaser  cannot  maintain  an  action  against  the  seller,  un- 
less he  can  show  that  the  seller  knew  it  to  be  the  horse  of  the  other  at 
the  time  of  the  sale,  —  the  scienter  or  fraud  being  the  gist  of  the  action 
where  there  is"  no  warranty,  for  there  the  party  takes  upon  himself  the 
knowledge  of  the  title  to  the  horse,  and  of  his  qualities."     In  Ormrod  v. 
Huth,-  TiNDAL,  C.  J.,  in  delivering  the  judgment  of  the  Exchequer  Cham- 
ber, says,  "  The  rule  which  is  to  be  derived  from  all  the  cases  appears  to 
us  to  be,    that  where,  upon   the  sale  of  goods,   the  purchaser  is  satisfied 
without  requiring  a  warranty  (which  is  a  matter  for  his  own  consideration), 
he  cannot  recover  upon  a  mere  representation  of  the  quality  by  the  seller, 
unless  he  can  show  that  the  representation  was  bottomed  in  fraud."    There, 
again,  the  representation  was  as  to  quality,  not  title.    [Parke,  B.    I  observe 
the  Chief  Justice  adds,  "Although  the  cases  may,  in  appearance,  raise 
some  difference  as  to  the  effect  of  a  false  assertion  or  representation  of  title 
in  the  seller,  it  will  be  found,  on  examination,  that  in  each  of  those  cases 
there  was  either  an  assertion  of  title  embodied  in  the  contract,  or  a  repre- 
sentation of  title  which  was  fixlse  to  the  knowledge  of  tlie  seller."]     In  Co. 
Litt.  102  a.,  there  is  this  passage.     "Note,  that,  by  the  civil  law,  every 
man  is  bound  to  warrant  the  thing  he  selleth  or  conveyeth,  albeit  there  be 
no  express  warranty  ;  but  the  common  law  bindeth  him  not,  unless  there 
be  a  warranty,  either  in  deed  or  in  law,  for  caveat  emptor.'"     But  it  does 
not  appear  whether  the  warranty  there  mentioned  applies  to  quality  or  to 
title.     In  Walker's  case^  it  is  said,   "Also,  if  a  man  sells  goods  for  money 
to  be  paid  at  several  days,  in  such  case,  although  the  goods  be  taken  by 
one  who  hath  right,  before  the  day,  yet  the  seller  shall  have  an  action  of 
debt  in  respect  of  the  contract."     [Pakke,  B.     In  Fitzherbcrt's  Nat.  Brev., 
9-4  c,  it  is  said,  "  If  a  man  sell  unto  another  man  a  horse,  and  warrant  him 
to  be  sound  and  good,  etc.,  if  the  horse  be  lame  or  diseased,  that  he  cannot 
work,  he  shall  have  an  action  on  the  case  against  him.     And  so  if  a  man 
bargain  and  sell  unto  another  certain  pipes  of  wine,  and  warrant  them  to 
be  good,  etc.,  and  they  are  corrupted,  he  shall  have  an  action  on  the  case 
against  him.     But  note,  it  behoveth  that  he  warrant  it  to  be  gooil,  and  the 
horse  to  be  sound,  otherwise  the  action  will  not  lie.     For  if  he  sell  the 
wine  or  horse  without  such  warranty,  it  is  at  the  other's  peril,  and  his  eyes 
and  his  taste  ought  to  be  his  judges  in  that  case:   20  H.  0,  35."     There 
is  a  case  of  Paget  v.  Wilkinson,  referred  to  in  the  note  to  Williamson  v.  Alli- 
son,* in  which  Holt,  C.  J.,  ruled,  "that  if  a  man  sell  blank  lottery  tickets, 
and  afterwards  another,  as  owner  of  these   tickets,  recover   them   of  the 
vendee,  unless  the  vendor  knew  them  to  be  the  in-opcrty  of  another,  or  war- 

1  9  R  &C.  928.  2  14  M.  &  W.  051. 

»  3  Kep.  22  a.  *  2  East,  418. 


350  MOKLEY   V.    ATTENBOROUGH.  [CHAP.  II. 

ranted  them,  neither  this  action  (under  title  *  Case  of  Torts  in  Nature  of 
Deceit  and  other  Wrongs '),  nor  assumpsit  for  money  had  and  received  to 
the  vendee's  use,  will  lie."]  The  doctrine  of  caveat  emptor  must  have  been 
introduced,  because  there  was  something  against  which  the  vendee  could 
guard  himself.  Several  authorities  support  the  plaintiff's  view.  Crosse  v. 
Gardiner,^  was  an  action  on  the  case  against  the  vendor  of  goods,  for  falsely 
affirming  them  to  be  his  own,  without  saying  that  he  knew  them  to  be  the 
goods  of  another ;  and  the  court  held,  that  the  action  lay  on  this  bare  affir- 
mation, because  the  plaintiff  had  no  means  of  knowing  to  whom  the  property 
belonged,  but  only  by  the  possession.  [Parke,  B.,  referred  to  Broom's  Legal 
Maxims,  chap.  9.]  In  Medina  v.  Stoughton,^  Holt,  C.  J.,  says,  "  Where 
one  having  the  possession  of  any  personal  chattel  sells  it,  the  bare  affirming 
it  to  be  his  amounts  to  a  warranty,  and  an  action  lies  on  the  affirmation  ; 
for  his  having  possession  is  a  color  of  title,  and  perhaps  no  other  title  can 
be  made  out ;  aliter  where  the  seller  is  out  of  possession,  for  there  may  be 
room  to  question  the  seller's  title,  and  caveat  emptor,  in  such  case,  to  have 
either  an  express  warranty  or  a  good  title."  The  distinction,  however,  be- 
tween the  vendor's  being  in  or  out  of  possession  is  repudiated  by  Buller,  J., 
in  Pasley  v.  Freeman.^  But  in  Roswel  v.  Vaughan,*  which  was  an  action 
of  deceit  against  a  person  for  falsely  affirming  that  he  was  incumbent  of  a 
certain  vicarage,  and  had  a  right  to  the  tithes,  aud  afterwards  selling  them  ; 
it  was  held  that  the  action  would  not  lie,  because  he  gave  no  warranty, 
and  had  not  any  possession.  And  in  Kent's  Commentaries  ^  it  is  said,  "  In 
every  sale  of  a  chattel,  if  the  possession  be  at  the  time  in  another,  and 
there  be  no  covenant  or  warranty  of  title,  the  rule  of  caveat  emptor  applies, 
and  the  party  buys  at  his  peril.  But  if  the  seller  has  possession  of  tlie 
article,  and  he  sells  it  as  his  own,  and  not  as  agent  for  another,  and  for  a 
fair  price,  he  is  understood  to  warrant  the  title."  In  Adamson  v.  Jarvis,® 
the  court,  after  adverting  to  the  cases,  say,  "  These  cases  rest  on  this  prin- 
ciple, that  if  a  man,  having  the  possession  of  property  which  gives  him  the 
character  of  owner,  affirms  that  he  is  owner,  and  thereby  induces  a  man  t ) 
buy,  when,  in  point  of  fact,  the  affirmant  is  not  the  owner,  he  is  liable  to 
an  action."  And  in  Peto  v.  Blades'  it  was  held,  that  the  law  raises  an  im- 
plied promise,  in  a  sheriff  selling  goods  taken  in  execution,  that  he  does 
not  know  that  he  is  destitute  of  title  to  the  goods.  Furnis  v.  Leicester  ^ 
was  an  action  for  deceitfully  selling  sheep,  the  defendant  affirming  them  to 
be  his  own,  itbi  revera  they  were  the  sheep  of  J.  S. ;  and  "it  was  moved  in 
arrest  of  judgment,  that  the  action  lay  not,  because  he  doth  not  show  that 
the  defendant  had  committed  any  ofience  in  affirming  them  to  be  his,  and 
he  doth  not  show  that  he  had  any  damage,  or  that  J.  S.  had  retaken  them, 
or  sued  him  for  them,  as  42  Ass.  8.     Sed  non  allocatur,  for  the  sale  of  goods 

1  Carth.  90.  ^  i  Salk.  210  ;  1  Ld.  Raym,  593.  s  3  t.  R.  58. 

4  Cro.  Jac.  196.  «  Vol.  2,  p.  478.  «  4  Bing.  66. 

'  6  Taunt.  657.  ^  Cro,  Jac  474. 


SECT.  l]  MORLEY   V.   ATTENBOROUGH.  351 

which  were  not  his  own,  but  affirming  them  to  be  his  goods,  knowing  them 
to  be  a  stranger's,  is  the  oftence  and  cause  of  action."  In  2  Bl.  Com.  451, 
it  is  said,  "By  the  civil  haw  an  impHed  warranty  was  annexed  to  every  sale, 
in  respect  to  the  title  of  the  vendor;  and  so  too,  in  our  law,  the  purchaser 
of  goods  and  chattels  may  have  a  satisfaction  from  the  seller,  if  he  sells 
them  as  his  own,  and  the  title  proves  deficient,  without  any  express  war- 
ranty for  that  purpose."  In  Allen  v.  Hopkins,^  Pollock,  C.  B.,  in  deliver- 
ing the  judgment  of  the  court,  says,  "It  was  put  in  the  course  of  the 
argument  upon  the  ground  of  caveat  emptor.  I  certainly  can  find  no  au- 
thority, and  I  have  no  recollection  of  ever  heai'ing  that  doctrine  applied  to 
this  case,  that  the  buyer  is  bound  to  take  care  that  the  seller  has  a  good 
title  to  the  goods,  and  that,  if  it  turn  out  that  the  seller  has  not  a  good 
title,  the  buyer  of  the  goods  should  have  taken  care  of  that  before  he  made 
the  contract,  and  therefore  is  bound  by  the  contract,  notwithstanding  he 
is  able  to  prove  that  the  seller  has  no  title.  The  doctrine  of  caveat  emptor 
applies  not  at  all,  as  I  apprehend,  to  the  title  of  the  seller,  but  to  the  con- 
dition of  the  goods."  [Parke,  B.  That  is  only  a  dictum.  Pollock,  C.  B. 
The  case,  when  examined,  will  be  found  to  have  no  bearing  on  the  present 
point ;  a  judgment  must  be  taken  secundum  suhjectam  viateriem.']  In 
Smith's  Mercantile  Law,^  it  is  said  not  to  be  quite  clear  whether  the  war- 
rant}' of  title  is  express  or  implied.  [Parke,  B.,  refeiTed  to  Addison  on 
Contracts,  Ch.  6,  s.  3.]  The  ottering  goods  for  sale  is  evidence  for  a  jury 
that  the  party  affirms  the  title  to  be  good.  [They  also  cited  Kobinson  v. 
Anderton,^  and  Walker  v.  Mellor.*] 

Martin  and  Petersdorff,  contra.  The  law  will  not  imply  any  warranty  of 
title  on  the  sale  of  a  personal  chattel.  It  is  unfortunate  that  the  words 
caveat  emptor  should  have  been  used  as  a  maxim.  Their  real  meaning  is 
this,  that  since,  in  the  transfer  of  property,  circumstances  will  inevitably 
occur  by  which  one  of  the  parties  must  be  a  loser,  the  loss,  whether  arising 
from  defect  of  title  or  of  quality,  must  fall  on  the  purchaser,  unless  a  deceit 
has  been  practised  or  a  warranty  given.  'J'hat  rule  of  the  common  law 
originates  in  a  desire  of  peace;  for  if  the  rule  were  otherwise,  there  would 
be  numerous  actions  by  successive  purchasers  against  their  respective 
sellers,  before  the  party  in  fault  could  be  discovered.  The  passage  from 
Co.  Litt.  102  a.,  which  is  the  earliest  authority  on  the  subject,  is  strictly 
api)]ical>le  to  title.  Noy's  Maxims,  c.  42,  Walker's  case,*  and  Ormrod  v, 
Hutii,®  are  express  authorities  in  the  defendant's  favor.  In  Crosse  v.  Cardi- 
ner'  there  was  an  affirmation  by  the  seller  that  the  goods  were  his  own. 
The  case  of  Medina  v.  Stoughton,  as  reported  in  Lord  Raymond,  593,  was 
merely  assumpsit  on  a  warranty,  and  what  Lord  Holt  there  says  is,  "Where 
a  man  is  in  possession  of  a  thing,  which  is  color  of  title,  an  action  will  lio 

1  13  M.  &  W.  94.  2  p„g,,  4(52,  ,„>t.',  4lli  I'M.         »  Pi-ake,  129. 

*  17  L.  J.  Q.  B.  103.  *  3  iit'i..  22  a.  »  H  M.  &  \V.  664. 

T  Cartli.  90. 


352  MOELEY   V.    ATTENBOROUGH.  [CIIAP.  11. 

upon  a  bare  affirmation  that  the  goods  sold  are  his  own.  For  in  such  a 
case  it  amounts  to  a  warranty,  and  so  it  was  adjudged  in  this  court,  Mich, 
term,  1  Will.  &  INL,  B.  R.,  between  Crosse  and  Gardiner."  Chandelor  v. 
Lopus,^  and  P'urnis  v.  Leicester,^  show  that  on  the  simple  sale  of  goods 
without  warranty,  the  vendee  must  stand  the  loss.  The  note  to  Williamson 
V.  Allison  ^  supports  that  view.  Peto  v.  Blades  *  has  no  bearing  on  the  pres- 
ent point ;  and  the  language  of  Pollock,  C.  B.,  in  Allen  v.  Hopkins,^  was 
not  material  for  the  decision  of  the  case.  In  Ross  on  Vendors  and  Pur- 
chasers,^ it  is  said,  "  When  the  vendor  has  not  affirmed  the  goods  to  be  his, 
nor  expressly  warranted  them,  the  vendee  is  without  remedy,  for  the  com- 
mon law  will  not  imply  a  warranty ;  and  in  such  case  the  maxim  is  caveat 
emptor."     [They  also  cited  1  Eoll.  Abr.  tit.     "Action  sur  Case"  (P),  pi.  8  ; 

Power  V.  Barham.''] 

Cur.  adv.  vult. 

The  judgment  of  the  Court  was  now  delivered  by 

Parke,  B.  This  case  was  argued  some  time  ago  before  my  Lord  Chief 
Baron,  my  Brothers  FtOLFE,  Platt,  and  myself,  and  stood  over  for  our  con- 
sideration. The  plaintiif  brought  an  action  of  assumpsit,  stating,  that  in 
consideration  that  the  plaintiff  would  buy  a  harp  for  a  certain  sum,  the 
defendant  promised  that  he,  the  defendant,  had  lawful  right  to  sell  it,  and 
the  breach  assigned  was  that  he  had  not. 

It  appeared  on  the  trial  before  my  Brother  Platt,  that  the  defendant, 
who  was  a  pawnbroker,  had  the  harp  pledged  with  him  in  the  way  of  his 
business,  and,  the  time  having  elapsed  for  its  redemption,  and  the  pledge 
being  unredeemed,  offered  it  for  sale  through  certain  auctioneei'S,  who 
sold  it  to  the  plaintiff.  It  turned  oiit  that  the  harp  had  been  pledged 
to  the  defendant  by  a  person  who  had  no  title  to  it,  and  the  real  owner 
obliged  the  plaintiff  to  give  it  np,  after  it  had  been  delivered  to  him  by 
the  defendant.  But,  of  the  want  of  title  of  the  pawner  to  it  the  de- 
fendant was  ignorant,  and  there  was  no  express  warranty.  My  Brother 
Platt  directed  a  verdict  for  the  plaintiff,  i-eserving  leave  to  move  to  enter 
a  nonsuit. 

On  showing  cause,  the  case  was  fully  argued,  and  every  authority  cited 
and  commented  upon  on  both  sides,  bearing  on  the  question,  whether  there 
is  an  implied  warranty  of  title  in  the  contract  of  sale  of  an  article,  or  under 
what  circumstances  there  is  a  liability  on  the  part  of  the  vendor  to  make 
good  a  loss  by  defect  of  title. 

It  is  very  remai'kable  that  there  should  be  any  doubt,  as  that,  certainlj^ 
is  a  question  so  likely  to  be  of  common  occurrence,  especially  in  this  com- 
mercial country.  Such  a  point,  one  would  have  thought,  would  not  have 
admitted  of  any  doubt.  The  bargain  and  sale  of  a  specific  chattel,  by  our 
law  (which  differs  in  that  respect  from  the  civil  law),  undoubtedly  transfers 

1  Cro.  Jac.  4.  2  d-o.  Jac.  474.  «  2  East,  448.  *  .5  Taunt.  657. 

6  13  M.  &  W.  94.         6  282,  1st  Ed.;  335,  2d  Ed.  "^  4  A.  &  E.  473. 


SECT.  I.]  MORLEY   V.   ATTENBOROUGH.  353 

all  the  property  the  veudor  has,  where  nothing  further  remains  to  be  clone 
according  to  the  intent  of  the  parties  to  pass  it.  But  it  is  made  a  question, 
whether  there  is  annexed  by  law  to  such  a  contract,  which  operates  as  a 
conveyance  of  the  property,  an  implied  agreement  on  the  part  of  the  vendor, 
that  he  has  the  ability  to  convey.  With  respect  to  executori/  contracts  of 
purchase  and  sale,  where  the  subject  is  unascertained,  and  is  afterwards  to 
be  conveyed,  it  would  probably  be  implied  that  both  parties  meant  that  a 
good  title  to  that  subject  should  be  transferred,  in  the  same  manner  as  it 
would  be  implied,  under  similar  circumstances,  that  a  merchantable  article 
was  to  be  supplied.  Unless  goods,  which  the  party  could  enjoy  as  his  own, 
and  make  full  use  of,  were  delivered,  the  contract  would  not  be  performed. 
The  purchaser  could  not  be  bound  to  accept  if  he  discovered  the  defect  of 
title  before  delivery,  and  if  he  did,  and  the  goods  were  recovered  from  him, 
he  would  not  be  bound  to  pay,  or,  having  paid,  he  would  be  entitled  to 
recover  back  the  price,  as  on  a  consideration  which  had  failed.  But  when 
there  is  a  bargain  and  sale  of  a  specific  ascertained  chattel,  which  operates 
to  transmit  the  property,  and  nothing  is  said  about  title,  what  is  the  legal 
effect  of  that  contract  1  Does  the  contract  necessarily  import,  unless  the 
contrary  be  expressed,  that  the  vendor  has  a  good  title?  or  has  it  merely 
the  effect  of  transferring  such  title  as  the  vendor  has?  According  to  the 
Roman  law,*  and  in  France,^  and  Scotland,  and  partially  in  America,^  there 
is  always  an  implied  contract  that  the  vendor  has  the  right  to  dispose  of 
the  sul)ject  which  he  sells  ;*  but  the  result  of  the  older  authorities  is,  that 
there  is  by  the  law  of  England  no  warranty  of  title  in  the  actual  contract 
of  sale,  any  more  than  there  is  of  quality.  The  rule  of  caveat  emx>tor  ap- 
plies to  both  ;  but  if  the  vendor  knew  that  he  had  no  title,  and  concealed 
that  fact,  he  was  always  held  responsible  to  the  purchaser  as  for  a  fraud, 
in  the  same  way  that  he  is  if  he  knew  of  the  defective  quality.  This  rule 
will  be  found  in  Co.  Litt.  102  a. ;  3  Eep.  22  a;  Noy,  Max.  42  ;  Fitz.  Nat. 
Brev.  94  c,  in  Springwell  v.  Allen,^  cited  by  Littledale,  J.,  in  Early  v.  Gar- 
rett,® and  in  Williamson  v.  Allison,''  referred  to  in  the  argument.  The  same 
principle  applies  to  transfer  by  deed.  Lord  Hale  says,  "  Though  the  words 
'  assign,  set  over,  and  transfer,'  do  not  amoimt  to  a  covenant  against  an 
eign  title,  yet,  as  against  the  convenantor  liimself,  it  will  amount  to  a 
covenant  against  all  claiming  under  him  :"  (Deering  v.  Farrington,^  which 
was  an  assignment  of  a  chose  in  action.^ 

It  may  be,  that  as  in  the  earlier  times  the  chief  transactions  of  purchase 
and  sale  were  in  markets  and  fairs,  where  the  bona  fide  purchaser  without 
notice  obtained  a  good  title  as  against  all  except  the  Crown  (and  afterwards 
a  prosecutor,  to  whom  restitution  is  ordered  by  the  21  lien.  8,  c.  11),  the 

1   Vide  Dornat,  Rook  1.  tit.  2,  §  2,  nrt.  3.  «  Codo  Civil,  c.  4,  §  1,  nrt.  1C03. 

'  1  Johns.  Hep.  11  \\  Broom's  Maxims,  C28,  wliere  thi.s  .subject  is  well  diacussed. 
*  Bell  on  Sale,  94.  »  Mey",  01-  »  9  B.  &  C.  932. 

'  2  East,  449.  »  3  Kcb.  304. 

23 


354  MORLEY   V.    ATTENBOROUGH.  [CHAP.  II. 

common  law  did  not  annex  a  warranty  to  any  contract  of  sale.  Be  that 
as  it  may,  the  older  authorities  are  strong  to  show  that  there  is  no  such 
warranty  implied  by  law  from  the  mere  sale.  In  i-ecent  times  a  different 
notion  appears  to  have  been  gaining  ground  (see  note  of  the  learned  editor 
to  3  Eep.  22  a)  ;  and  Mr.  Justice  Blackstone  says,  "  In  contracts  for  sale 
it  is  constantly  understood  that  the  seller  undertakes  that  the  commodity 
he  sells  is  his  own  ; "  and  Mr.  Wooddeson,  in  his  Lectures,^  goes  so  far  as 
to  assert  that  the  rule  of  caveat  emptor  is  exploded  altogether,  which  no 
authority  warrants. 

At  all  times,  however,  the  vendor  was  liable  if  there  was  a  warranty 
in  fact ;  and  at  an  early  period,  the  affirming  those  goods  to  be  his  own 
by  a  vendor  in  possession,  appears  to  have  been  deemed  equivalent  to  a  war- 
ranty. Lord  Holt,  in  Medina  v,  Stoughton,^  says,  that  "  where  one  in  pos. 
session  of  a  personal  chattel  sells  it,  the  bare  affirming  it  to  be  his  own 
amounts  to  a  warranty  ;  "  and  Mr.  Justice  Buller,  in  Pasley  v.  Freeman,^ 
disclaims  any  distinction  between  the  affect  of  an  affirmation,  when  the 
vendor  is  in  possession  or  not,  treating  it  as  equivalent  to  a  warranty  in 
both  cases. 

Some  of  the  text  writers  drop  the  expression  of  "  warranty  "  or  "  affirma- 
tion," and  lay  down  in  general  terms,  that  if  a  man  sells  goods  as  his  own, 
and  the  title  is  deficient,  he  is  liable  to  make  good  the  loss  ;*  the  commen- 
tator cites,  for  that  position,  Cro.  Jac.  474,  and  1  Eoll.  Abr.  70,  in  both 
which  cases  there  was  an  allegation  that  the  vendor  affirmed  that  he  had 
a  title,  and  therefore  it  would  seem  that  the  learned  author  treated  the 
expression,  "selling  as  his  own,"  as  equivalent  to  an  affirmation  or  war- 
ranty. So  Chancellor  Kent,  in  2  Com.  478,  says,  "  that  in  every  sale  of  a 
chattel,  if  the  possession  be  in  another,  and  there  be  no  covenant  or  war- 
ranty of  title,  the  rule  of  caveat  emptor  applies,  and  the  party  buys  at  his 
peril ;  but  if  the  seller  has  possession  of  the  article,  and  he  sells  it  at  his 
own,  and  for  a  fair  price,  he  is  understood  to  warrant  the  title."  From 
the  authorities  in  our  law,  to  which  may  be  added  the  opinion  of  the  late 
Lord  Chief  Justice  Tindal,  in  Ormrod  v.  Huth,^  it  would  seem  that  there 
is  no  implied  warranty  of  title  on  the  sale  of  goods,  and  that  if  there  be  no 
fraud,  a  vendor  is  not  liable  for  a  bad  title,  unless  there  is  an  express  war- 
ranty, or  an  equivalent  to  it,  by  declarations  or  conduct;  and  the  question 
in  each  case,  where  there  is  no  warranty  in  express  terms,  will  be,  whether 
there  are  such  circumstances  as  to  be  equivalent  to  such  a  warranty. 
Usage  of  trade,  if  proved  as  a  matter  of  fact,  would,  of  course,  be  sufficient 
to  raise  an  inference  of  such  an  engagement ;  and  without  proof  of  such 
usage,  the  very  nature  of  the  trade  may  be  enough  to  lead  to  the  conclu- 
sion, that  the  person  carrying  it  on  must  be  understood  to  engage  that  the 
purchaser  shall  enjoy  that  which  he  buys,  as  against  all  persons.     It  is, 

1  Vol.  2,  p.  415.  2  1  Salk,  210  ;  Ld.  Raym.  593. 

8  3  T.  II.  57.  *  2  Black.  Com.  451.  ^  14  M.  &  W.  664. 


SECT.  I.]  MORLEY   V.    ATTENBOROUGH.  355 

perhaps,  with  reference  to  such  sales,  or  to  executory  contracts,  that  Black- 
stone  makes  the  statement  above  referred  to. 

Similar  questions  occur  in  cases  as  to  the  quality  of  goods,  in  which 
it  is  clear  there  is,  by  law,  no  implied  warranty ;  yet,  if  goods  are  or. 
dered  of  a  tradesman,  in  the  way  of  his  trade,  for  a  particular  purpose, 
he  may  be  considered  as  engaging  that  the  goods  supplied  are  reasonably 
fit  for  that  purpose.  We  do  not  suppose  that  there  would  be  any  doubt,  if 
the  articles  are  bought  in  a  shop  professedly  carried  on  for  the  sale  of 
goods,  that  the  shopkeeper  must  be  considered  as  warranting  that  those 
who  purcliase  will  have  a  good  title  to  keep  the  goods  purcliased.  In  such 
a  case  the  vendor  sells  "as  his  own,"  and  that  is  what  is  equivalent  to  a 
warranty  of  title.  But  in  the  case  now  under  consideration,  the  defendant 
can  be  made  responsible  only  as  on  a  sale  of  a  forfeited  pledge  eo  nomiiie. 
Though  the  harp  may  not  have  been  distinctly  stated  in  the  auctioneer's 
catalogue  to  be  a  forfeited  pledge,  yet  the  auctioneer  had  no  authority 
from  the  defendant  to  sell  it  except  as  such.  The  defendant,  therefore, 
cannot  be  taken  to  have  sold  it  with  a  more  extensive  liability  than  such 
a  sale  would  have  imposed  upon  him ;  and  the  question  is,  whether,  on 
such  a  sale,  accompanied  with  possession,  there  is  any  assertion  of  an  ab- 
solute title  to  sell,  or  only  an  assertion  that  the  article  has  been  pledged 
with  him,  and  the  time  allowed  for  redemption  has  passed.  On  this  ques- 
tion we  are  without  any  light  from  decided  cases. 

In  our  judgment,  it  appears  unreasonable  to  consider  the  pawnbroker, 
fi'om  the  nature  of  his  occupation,  as  undertaking  anything  more  than 
that  the  subject  of  sale  is  a  pledge  and  irredeemable,  and  that  he  is 
not  cognizant  of  any  defect  of  title  to  it.  By  the  statute  law.i  he  gains 
no  better  title  by  a  pledge  than  the  pa\vner  had  ;  and  as  the  rule  of 
the  common  law  is,  that  there  is  no  implied  warranty  from  the  mere  con- 
tract of  sale  itself,  we  think,  that  where  it  is  to  be  implied  from  the 
nature  of  the  trade  carried  on,  the  mode  of  carrying  on  the  trade  should 
be  such  as  clear]}'  to  raise  that  inference.  In  tliis  case  wo  think  it  does 
not.  Th(;  vendor  must  be  considered  as  selling  merely  the  ri<;ht  to  the 
pledge  which  he  himself  had  ;  and  therefore  we  think  the  rule  must  be 
absolute. 

Since  tlie  argument,  we  find  that  there  was  a  count  for  money  had  and 
received,  as  well  as  the  count  on  the  warranty,  in  the  declaration.  But 
the  attention  of  the  judge  at  the  trial  was  not  drawn  to  this  count,  nor 
was  it  noticed  on  the  argument  in  court. 

It  may  be,  that  though  there  is  no  imi)licd  warranty  of  title,  so  that  the' 
vendor  would  not  be  liable  for  a  breach  of  it  to  uulicpiidated  damages,  yet 
the  purcliaser  may  recover  back  the  purchase-money,  as  on  a  consideration 
that  failed,  if  it  could  1)C  shown  that  it  was  the  understanding  of  \hA\\  par- 
ties that  the  bargain  should  be  put  an  end  to  if  the  purchaser  should  not 

J  Sic  1  Jac.  1,  c.  21. 


356  STKICKLAND   V.    TURNER.  [CHAP.  II. 

have  a  good  title.  But  if  there  is  no  implied  warranty  of  title,  some  cir- 
cumstances must  be  shown  to  enable  the  plaintiff  to  recover  for  money  had 
and  received.  This  case  was  not  made  at  the  trial,  and  the  only  question 
is,  whether  there  is  an  implied  warranty.  Rtde  absolute. 


STRICKLAND   v.  SARAH  TURNER,   Executrix  of  E.  H.  LANE.^ 
In  the  Court  op  Exchequer,  January  31,  1852. 

[Repoi-ted  in  7  Exchequer  Reports,  208.] 

Assumpsit  for  money  had  and  received  by  the  defendant,  as  executrix  of 
Edwai'd  ?Ienry  Lane,  deceased,     Plea,  non-assumj^sit,  and  issue  thereon. 

By  mutual  consent  and  by  a  judge's  oi'der,  a  case,  of  which  the  following 
are  the  material  facts,  was  stated  for  the  opinion  of  this  court. 

The  action  was  brought  to  recover  the  sum  of  973/.  lis.  under  the  fol- 
lowing circumstances  :  Edward  Henry  Lane,  of  Sydney,  New  South  Wales 
(the  testator),  was  entitled  for  his  life  to  an  annuity  of  100^.  per  annum, 
payable  half  yearly,  on  the  30th  of  March  and  the  30th  of  September,  be- 
queathed to  him  under  the  will  of  a  Mrs.  Way. 

The  plaintiff  was  one  of  the  executors,  and  the  residuarj'  legatee,  of  Mrs. 
Way. 

On  the  4th  of  Jane,  1847,  Mr.  Lane,  then  residing  at  Sydney,  transferred 
the  annuity  by  deed  to  Arthur  Daintrey  and  Adrian  Daintrey,  who  resided 
in  England,  to  dispose  of  as  his  trustees  and  for  his  benefit. 

In  November,  1847,  a  correspondence  was  entered  into  between  the 
Messrs.  Daintrey  and  a  Mr.  Cookney,  the  attorney  and  agent  of  the  plain- 
tiff, upon  the  subject  of  the  purchase  of  the  annuity  by  the  plaintiff. 
After  much  correspondence  on  the  subject,  the  following  letters  passed 
between  Mr.  Cookney  and  Mr.  Adrian  Daintrey  :  — 

16th  December,  1848. 
Dear   Sir,  —  I  shall  be  extremely  obliged   by  an  early  and   definitive 
answer  on  the  subject ;  for  if  Mr.  Strickland  does  not  purchase,  there  are 
other  persons  ready  to  treat. 

I  am,  etc., 

A.  Daintrey. 
J.  T.  Cockney,  Esq. 

21st  December,  1848. 
Dear  Sir,  —  I  fear  if  you  can  get  a  purchaser  for  much,  if  anything,  be- 
yond 1000/.  after  April  next  (as  at  that  time  another  half-year's  annuity 
will  be  due  less  a  year's  duty),  that  Mr.  Strickland  will  decline  treating  for 

*  This  case  should  have  been  inserted  in  the  subdivision  imniediatcl}'  following.  —  Ed. 


SECT.  I.]  STRICKLAND   V.   TURNER.  357 

it.  My  view  is,  that  a  purchaser  ought  to  buy  the  annuity  to  pay  G  per 
cent  at  least,  and  to  insure  the  hfe  would  cost  nearly  3  per  cent,  and  that 
would  be  9  per  cent  for  the  purchase  money.  This  would  make  the  out- 
side value  1100/.,  11  times  9  ])eing  99,  and  the  expense  of  purchase  would 
far  exceed  another  11.  per  annum.  Supposing  Mr.  Lane  to  be  dead  when 
you  sell,  how  do  you  propose  securing  the  purchaser  ag-ainst  this  contiu- 
irency  1  for,  unless  the  insurance  office  would  undertake  to  pay  the  money, 
.1  purchaser  cannot  be  advised  to  part  with  his.  !Most  probably  you  have 
considered  these  matters,  and  will  favor  me  with  your  sentiments  thereon. 

I  am,  etc., 

J.    T.    COOKNEY. 

A.  Daixtrey,  Esq. 

22(i  December,  1S48. 
Dear  Sir,  —  Assuming  that  Mr.  Strickland  will  purchase,  I  am  in  a 
condition  immediately  to  convey,  as  I  have  a  discretion  to  sell  as  low  as 
1000/.  I  will  do  so  if  Mr.  Strickland  will  agree  to  purchase  at  that  sum. 
This  agreement  to  purchase  would  of  course  be  conditional  on  my  sljowing 
a  good  title  to  convey.  My  brother  is  in  practice  as  a  solicitor  in  Sydney, 
and  he  is  concerned  for  Mr.  Lane,  who,  when  I  last  heard  from  my  brother 
a  short  time  since,  was  as  well  as  ever. 

A.  Daintrey. 
J.  T.  Cookney,  Esq. 

After  a  few  other  letters,  the  following  letters  passed  between  the  same 

parties :  — 

26th  Jauuary,  1849. 

Dear  Sir,  —  I  have  heard  from  Mr.  Strickland,  and  although  his  full 
object  will  not  be  accomplished,  he  is  willing  to  give  1000/.  for  the  annuity  ; 
and  looking,  as  you  say,  to  the  loose  mode  of  the  bequest,  I  think  the  offer 
a  liberal  one.  If  accepted,  then  the  only  point  to  be  considered  is,  how  the 
pale  is  to  be  completed  in  the  absence  of  proof  of  Mr.  Lane  being  alive. 

Yours,  etc., 

J.  T.  COOKXEY. 

27th  January,  1840. 
Dear  Sir,  —  I  accept  Mr.  Strickland's  offer  of  1000/.  for  tliis  annuity 
on  the  following  conditions  :  1st,  That  he  take  an  assignment  of  the  annuity 
from  myself  and  my  brother  Adrian,  under  the  assignment  to  us,  a  copy  of 
which  I  inclose.  2dly,  That  the  purchase  bo  completed  within  one  month 
fron)  this  day.  3dly,  That  Mr.  Lane  be  at  no  expense  about  showing  a 
title  to  the  annuity,  and  that  no  deductions  be  made  on  account  of  legacy- 
duty  remaining  uni)aid.  4thly,  That  the  amuiity,  or  a  proportion  of  it, 
be  paid  up  to  the  day  of  conii)letion.  Probably  the  signature  of  Mr.  Lane 
to  the  original  a.ssignnient  may  be  known  to  yourself  or  Mr.  Strickland. 


358  STRICKLAND   V.   TURNER.  [CHAP.  II. 

If  the  conditions  are  acceded  to,  I  will  come  to  town  and  settle  as  soon 

as  you  are  prepared.     My  brother  Adrian  is  resident  there.     I  shall   be 

much  obliged  by  despatch.     Proof  of  Mr.  Lane's  being  alive  will  not  of 

course  be  at  all  necessary. 

I  am,  etc., 

A.  Daintrey. 

31st  January,  1849. 
Dear  Sir,  —  The  offer  I  made  had  reference  to  my  letter  of  the  2 1st  of 
December  last,  viz.  the  purchase  of  an  annuity  of  100/.,  to  be  completed 
next  April  after  the  half  year's  annuity  was  paid  and  the  duty  satisfied, 
and  having  the  balance  of  duty  18Z.  2s,  4(/.  allowed  out  of  his  purchase 
money.  This  my  client  will  be  prepared  to  do  on  the  30th  of  next  April,^ 
unless  the  money  is  an  object  before,  and  in  that  case  my  client  will  be 
content  to  take  5/.  per  cent  upon  his  purchase  money  to  the  30th  of  April,^ 
and  give  credit  for  the  annuity,  subject  to  the  deduction  for  legacy  duty, 

thus  :  — 

£  s.  d. 

Say  Purchase  Money 1000  0     0 

Half  Year's  Annuity  to  30th  April 50  0     0 

1050     0    0 
A  Year's  Interest  on  18Z.  25.  id.,  Fourth  Year's  Duty        .        .         .         .  0  18     0 

1050  18     0 

Deduct  3d  Year's  Duty ^18     2     4 

4th  ditto 18     2     4 

2  Months'  Interest  from  28th  of  February  to  30th  of 

April  on  lOOOZ 8     6     8 

44  11     4 
^1006     6     8 

If  you  are  content  with  this  arrangement  I  will  proceed  to  raise  the 
money,  and  let  you  have  the  draft  assignment  in  a  few  days. 

I  am,  etc., 

J.  T.  Cockney. 

1st  February,  1849. 
Dear  Sir,  — If  your  letter  of  31st  of  January  is  to  be  read  in  connec- 
tion with  that  of  the  21st  of  December,  the  latter  certainly  favors  the  offer 
I  have  made ;  for  it  informs  me  that  Mr.  Strickland  would  not  give  more 
than  1000^.  after  April,  when  of  course  the  instalment  of  annuity  and  duty 
would  have  been  paid.  1  am  sure  that  upon  reference  to  this  letter  you 
■will  see  that  this  is  the  fair  construction  of  it,  and  I  think,  therefore,  that 
the  conditions  of  my  last  letter  ought  to  be  acceded  to. 

I  am,  etc., 
*  A.  Daintrey. 

1  Sic.  '■^  Sic. 


SECT.  I.]  STRICKLAND   V.   TURNER.  359 

3d  February,  1849. 
Dear  Sir,  —  I  only  referred  yon  to  my  letter  of  the  21st  of  December, 
as  evidence  of  what  I  thought  the  value  of  an  annuity  of  100/.,  and  that 
it  was  the  object  in  view.  Mr.  Strickland  does  not,  and  did  not,  entertain 
my  views,  but  considers  the  offer  made  in  my  last  letter  very  fair  and 
liberal, 

Mr.  S.  will  be  glad  to  know  if  the  offer  will  be  accepted,  and  particularly 
if  the  money  is  to  be  paid  this  month. 

Yours,  etc., 

J.    T.    CuOKNEV. 

6th  Februaiy,  1S49. 
Dear  Sir,  —  If  Mr.  Strickland  will  not  give  more  than  you  say,  /  musC 
accept  the  uffer.  I  assume  of  course  that  the  last  half  year's  annuity  has 
been  paid.  I  should  like  to  have  the  draft  assignment  as  soon  as  possible, 
and  to  complete  with  all  despatch,  as  Sir  C.  F.'s  son  is  going  out  in  about 
ten  days,  and  will  take  charge  of  my  letters  to  my  brother. 

I  am,  etc., 

A.  Daintrey, 

19th  February,  1849. 
Dear  Sir,  —  I  have  been  expecting  the  draft  assignment  as  promised  in 
a  few  days  by  your  letter  of  the  31st  ult.     I  hope  to  receive  it  without 
delay.  I  am,  etc., 

A.  Daintrey. 

20th  February,  1849. 
Dear  Sir,  —  I  send  you  draft  assignment  and  release.     I  think  that  the 
consideration  liable  to  ad  valarem  duty  will  be  973/.  lis.  OJ.,  if  the  money 
is  paid  on  the  28th  inst,  instead  of  the  30th  April  next :  what  say  you] 

I  am,  etc., 

J.    T.    COOKXEY. 

£      s.  (I. 

Amount  of  nominal  Consideration 1000    0    0 

Less  4th  Year's  duty iJlS     2     4 

and  Interest  on  prompt  Payment 8     6     8 

26    9     0 
Net  Consideration j£973     11     0 

23d  February,  1849. 
Dear  Sir,  —  I  return  you  draft  approved,  with  some  slight  alterations. 
I  propose  to  settle  at  your  office  on  Wednesday  the  28th  inst,  at  10  o'clock, 
unless  I  hear  from  you  to  the  contrary  by  return,  and  have  made  an  ap- 
pointment with  my  brother  to  that  effect.  I  dare  say  you  will  favor  mo 
with  a  line  by  return  at  all  events.  I  am,  etc., 

A.  Daintrey. 


360  STRICKLAND  V.  TURNEK.  [CHAP.  IL 

24th  February,  1849. 
Dear  Sir,  —  I  conclude  the  assignment  to  you  is  stamped  ;  if  not,  you 
vill  of  course  get  it  done.     The  time  you  mention  will  suit  very  well. 

Yours  truly, 

J.    T.    COOKNEY. 

25tli  February,  1849. 
Dear  Sir,  —  The  assignment  to  myself  and  brother  is  not  stamped,  nor 
I  believe  is  a  stamp  necessary,  etc.  Be  pleased  to  let  me  hear  from  you  by 
return,  and  let  me  have  the  engrossment  here  by  return,  or  at  etc.,  ou 
Tuesday  evening  by  seven  o'clock.  My  brother  will  attend  there  to  exe- 
cute, and  it  is  probable  he  will  be  obliged  to  leave  London  on  Wednesday 

oaorning. 

I  am,  etc., 

A.  Daintrey. 

26tli  February,  1849. 
Dear  Sir,  -  - 1  am  sorry  to  differ  with  you  about  the  stamp  duty.  I  am 
quite  satisfied  you  could  not  compel  a  purchaser  to  take  to  the  title  v/ith- 
out  a  35s.  on  the  assignment  to  you,  and  the  Office  would  stamp  it.  I 
should  like  to  see  the  deed  of  assignment  to  you,  which  my  clerk  can  do 
when  he  attends  at  etc.  to-morrow,  to  see  your  brother  execute  the  pro- 
posed deed  of  sale  to  Mr.  Strickland. 

I  am  yours  truly, 

J.    T.    CoOKNEY. 

By  indenture,  bearing  date  the  28th  of  February,  1849,  and  then  made 
between  the  said  Arthur  and  Adrian  Daintrey  of  the  one  part,  and  the 
plaintiff  of  the  other  part,  after  reciting  that  the  said  E.  H.  Lane  was  en- 
titled to  the  said  annuity,  etc.,  for  his  life,  and  also  reciting  {inter  alia)  the 
9aid  assignment  of  the  4th  of  June,  1847  ;  and  that  the  plaintiff,  as  such 
residuary  legatee  as  aforesaid,  had  duly  paid  the  said  annuity  for  the  use 
of  the  said  E.  H.  Lane  up  to  the  30th  day  of  March  next ;  and  also  recit- 
ing the  said  indenture  of  the  4th  day  of  June,  1847,  and  that  the  said 
Messrs.  Daintrey  had  contracted  with  the  plaintiff  for  the  absolute  sale,  etc., 
to  him  of  the  said  annuity,  and  all  growing  and  future  payments  thereof, 
for  the  price  of  973^.  lis.,  it  was  witnessed  that,  in  pursuance  of  the  said 
contract,  and  in  consideration  of  the  sum  of  973^.  lis.,  the  said  Messrs. 
Daintrey  did  grant,  bargain,  sell,  etc.,  unto  the  plaintiff,  his  heirs,  etc.,  all 
the  said  annuity  or  sum  of  100^.,  and  all  growing  and  future  payments 
thereof,  To  have  and  to  hold  the  said  annuity  unto  the  plaintiff,  his  heirs, 
etc.,  from  henceforth  during  all  the  residue  of  the  life  of  the  said  E.  H. 
Lane,  to  the  end  and  intent  that  the  plaintiff,  his  heirs,  etc.,  might  be  en- 
titled to  receive  and  retain  the  same  for  his  and  their  own  use  and  benefit. 
The  consideration  money,  amounting  (exclusively  of  the  arrears  of  the 


SECT.  I.]  STRICKLAND   V.  TURNER.  361 

said  auuuitv)  to  973/.  lis.  was  paid  on  behalf  of  plaintiff  to  the  said  Arthur 
Daiatrey,  And  the  fullowiug  receipt  was  then  signed  by  the  said  Arthur 
Daintrey,  the  sum  of  '^Ql.  19s.  therein  mentioned  having  been  paid  on  the 
same  day  :  — 

Ee  Edward  Lane's  Annuity. 

28th  of  February,  1849. 
Keceived  balance  of  one  year's  annuity  to  the  30th  March  next,  viz.,  the 
sum  of  86/,  19s.,  after  giving  credit  for  legacy  duty  payable  in  respect  of 
the  said  annuity. 

(Signed)     A.  Daixtrey 

(For  Self  k  Co.  —  trustee). 

Annuity £100    0     0 

Deduction 13     1     0 


^86  19    0 


The  transaction  was  perfectly  bona  fide. 

It  was  subsequently  ascertained,  that  the  said  E.  H.  Lane  died  at  Syd- 
ney on  the  Gth  of  February,  1849,  having  previously  made  his  will,  and 
having  appointed  the  defendant  sole  executrix  thereof.  The  said  sum  of 
973/.  \\s.  Od.  was  paid  by  the  said  Arthur  Daintrey  into  the  Bank  of  Aus- 
tralasia, to  the  account  of  the  said  E.  H.  Lane,  before  the  news  of  his  death 
reached  this  country.  It  was  admitted,  that  the  same  was,  with  the  plain- 
tiff's concurrence,  received  by  the  defendant  as  executrix  of  the  said  E.  H. 
Lane  after  his  death,  subject  to  be  refunded  to  the  plaintiff,  if,  under  the 
circumstances,  the  plaintitt"  should  be  so  entitled. 

The  court  were  to  be  at  liberty  to  draw  any  such  inference  from  the 
facts  of  the  case  as  a  jury  would  be  warranted  in  drawing. 

The  question  for  the  opinion  of  tlie  court  was,  whether,  under  the  fore- 
going circumstances,  the  plaintiii"  was  entitled  to  recover  from  the  dufend- 
ant  as  executrix  of  E.  U,  Lane  the  said  sum  of  973/.  lis.  so  paid;  and 
judgment  was  to  be  entered  in  accordance  with  the  opinion  of  the  court. 

Crowdtr  (^l\aymo)id  with  him)  for  the  plaintiff. 

Bramxvdl  {liew  witli  him)  for  the  defendant. 

Cur.  adv.  vult. 

The  judgment  of  the  Court  was  now  delivered  by 

Pollock,  C.  B. — The  question  in  this  case,  which  the  court  took  time 
to  consider,  lies  in  a  very  narrow  com])ass.  The  plaintiff  brought  his  ac- 
tion against  the  defendant  to  recover  back  money  paid  by  him  for  the  pur- 
chase of  an  annuity  bequeathed  to  Edward  Henry  Lane,  of  Sydney,  New 
South  Wales,  by  the  will  of  Mrs.  Elizabeth  Way.  That  annuity  Iiad  been 
assigned  by  Edward  Henry  Lane,  who  was  still  residing  in  Sydney,  to  Ar- 
thiu-  Daintrey  and  Adrian  Daintrey,  in  order  that  they,  as  his  trustees, 
might  dispose  of  it  in  England  for  his  benefit.     They  accordingly  entered 


362  STKICKLAND    V.    TUENER.  [CHAP.  II. 

into  a  negotiation  with  tbe  plaintiff,  who  was  the  residuary  legatee  under 
Mrs.  Way's  will,  for  the  purchase  of  this  annuity.  The  question  between 
the  parties  is  this,  —  whether  the  purchase  took  effect  during  the  existence 
of  the  annuity.  If  it  did,  though  but  for  an  instant,  the  plaintiff  is  not 
entitled  to  succeed ;  for  he  purchased  the  annuity,  and  cannot  complain 
that  in  so  doing  he  has  made  a  bad  bargain,  as  the  events  have  turned  out. 
But  if,  on  the  contrary,  the  annuity  had  ceased  to  exist  before  his  purchase, 
then  he  has  got  nothing  for  his  purchase  money,  and  is  entitled  to  recover 
it  back  from  the  defendant,  the  executrix  of  Lane,  who  has  received  it  from 
the  trustees. 

The  question  therefore  is,  what  was  the  bargain,  and  when  did  it  take 
effect.  If  the  annuity  was  sold  upon  the  5th  of  February,  1849,  by  the 
acceptance  contained  in  the  letter  of  that  date,  the  subsequent  death  of 
the  annuitant  at  Sydney  on  the  6th  of  February,  1849,  will  defeat  the 
plaintiff's  claim.  If,  on  the  other  hand,  the  agreement  was  for  a  future 
Bale,  to  be  effected  by  assignment  of  the  annuity,  which  took  place  on  the 
28th  of  February,  the  previous  death  of  the  annuitant  will  entitle  the 
plaintiff  to  recover. 

We  must  therefore  examine  carefully  the  different  letters  and  documents, 
to  see  which  of  these  two  views  of  the  case  we  ought  to  adopt  as  the  fair 
result  of  the  whole  correspondence.  There  is  no  doubt,  that,  if  the  pur- 
chase had  been  completed,  that  is  to  say,  if  there  had  been  an  agreement 
that  from  and  after  the  5th  of  February,  1849,  the  annuity  was  to  belong 
to  Mr.  Strickland,  and  the  money  given  for  it  to  belong  to  the  trustees,  the 
subsequent  death  of  Lane  would  make  no  difference.  Even  a  bill  for  a 
specific  performance  could  have  been  maintained  upon  such  an  agreement, 
according  to  the  case  of  Kenney  v.  Wexham.^  There  there  was  an  agree- 
ment dated  18th  April,  1818,  for  the  future  purchase  of  an  annuity  by  the 
payment  of  two  instalments,  the  first  in  October,  1818,  and  the  last  in 
January,  1819.  The  death  was  suV)sequent  to  the  last  stipulated  payment. 
And  the  Vice-Chancellor  held,  that  from  that  date  the  purchaser  became  en- 
titled to  it,  and  that  the  subsequent  death  of  the  annuitant  in  October, 
1820,  did  not  prevent  the  purchaser  from  having  a  specific  performance  ; 
and  for  this,  Mortimer  v.  Capper,'^  Jackson  v.  Lever,^  Coles  v.  Trecothick,* 
were  cited. 

But  here  in  the  correspondence  we  find  no  such  arrangement  till  the 
assignment  of  the  28th  of  February.  The  offer  which  is  stated  by  Mr. 
Strickland's  agent,  Mr.  Cookncy,  in  the  letter  of  Slst  January,  1849,  is  for 
the  purchase  of  the  annuity  "  to  be  completed  next  April,  after  the  current 
half-year's  annuity  is  paid,  and  the  legacy  duty  then  payable  satisfied,  and 
the  future  legacy  duty  allowed  for  ;"  and  he  adds,  that  his  client  will  be 
prepared  to  do  this  on  the  30th  of  April,  unless  they  can  agree  for  an  ear- 

1  6  Madd.  357.  2  i  Bro.  C.  C.  156. 

8  3  Bro.  C.  C.  604.  *  9  Yes.  234. 


SECT.  I.]  GURNEY  V.   WOMERSLEY.  363 

lier  day  of  pa\-ment,  and,  so  to  speak,  to  discount  the  payment  of  the  30th 
of  April  on  that  earlier  day. 

It  is  a  clear  stipulation  throughout  the  correspondence,  that  the  annuiry 
shall  continue  to  be  paid  up  to  that  day,  whatever  that  might  be ;  and 
until  that  day  was  fixed  it  is  impossible  to  ascertain  what  sum  of  money 
was  to  be  paid  and  received.  Kow  this  was  never  ascertained  or  settled  in 
the  lifetime  of  the  annuitant.  The  annuity,  tlicrefore,  still  continued  lo 
belong  to  Lane,  and  never,  as  the  Vice-Chancellor  says  in  Kenney  v.  Wex- 
ham,  passed  to  the  purchaser,  till  this  was  ascertained  and  the  bargain 
finally  arranged  between  them.  When  this  was  done,  the  annuity  became 
the  property  of  Strickland,  and  the  money  the  property  of  the  vendors. 
But  then  there  was  no  annuity  in  existence.  The  money,  therefore,  which 
was  paid,  was  paid  wholly  without  consideration,  and  may  now  be  recovered 
back  from  the  defendant,  to  whom,  as  the  executrix  of  Lane,  it  has  passed. 
We  think,  therefore,  that  the  judgment  should  be  fur  the  plaintift'. 

Judgment  fo)'  the  plaintiff. 


SAMUEL   GUENEY   and   Others   v.    THOMAS   SCURR 
WOMERSLEY   and   Another.^ 

In  The  Queen's  Bench,  November  4,  1854. 

\Reported  in  4  Ellis  and  Blackburn,  133.] 

Action  for  money  had  and  received,  and  on  accounts  stated.  Plea  ; 
Never  indebted. 

On  the  trial,  before  Lord  Campbell,  C.  J.,  at  the  London  sittings  after 
last  Trinity  term,  it  appeared  that  the  plaintiffs  are  money-dealers  and  bill- 
brokers,  carrying  on  business  on  a  large  scale  in  London  under  the  firm  of 
Overend,  Gurney  &  Co.  The  defendants  are  also  money-dealers  and  bill- 
brokers,  carrying  on  business  in  London  under  the  firm  of  Womersley  & 
Burt. 

On  the  17th  December,  1853,  Womersley  &  Burt  brought  to  Overend, 
Guiney  &  Co.,  for  discount,  what  purported  to  be  a  foreign  bill  of  exchange, 
drawn  at  Calcutta  by  J.  Le  Brun  on  P.  &  C.  Van  Notton  of  London  fur  ."{OoO/., 
payable  ninety  days  after  sight  to  the  order  of  T.  Dupont  of  Paris,  cndoi-sed 
specially  by  T.  Dupont,  to  W.  B.  Anderson,  and  accepted  by  P.  &  C.  Van 
Notten.  At  the  time  when  the  bill  was  offered  for  discount  it  did  not  bef.r 
the  endorsement  of  Anderson.  Overend,  Curney  it  Co.  ngroed  to  discount 
the  bill;  and  the  bill  was  taken  away  by  Womersley  &  Burt,  and  on  the 
same  morning,  was  left  with  Overend,  Gurney  &  Co.  endorsed  in  blank  by 
W.  B.  Anderson.  A  discount  ticket  was  made  out,  in  the  manner  usual  in 
business  (which  is  explained  hereafter),  showing  the  amount  of  tht;  bill,  less 

1  This  case  should  have  been  inserted  in  the  subdivision  inuuciliatily  following;.  —  l':ii. 


364  GURNEY   V.   WOMERSLEY.  [CHAP.  II. 

the  discount,  viz.:  301 U.  19s.  7d.,  and  sent  with  Overend,  Gurney  &  Co.'s 
check  for  that  amount  to  Womersley  &  Burt.  The  check  was  paid  by  them 
into  their  own  banker's ;  and  it  was  duly  honored. 

Shortly  afterwards,  it  was  discovered  that  Le  Brun,  the  supposed  drawer, 
and  T.  Dupont,  the  supposed  first  endorser,  were  fictitious  persons ;  and 
that  the  supposed  acceptance  of  P.  &  C.  Van  Notten,  who  were  a  firm  of 
high  standing  in  London,  was  a  forgery  committed  by  Anderson.  Ander- 
son was  tried  for  forgery,  and  convicted ;  and  he  was  made  a  bankrupt. 

The  present  action  was  brought  to  recover,  from  the  defendants,  the 
amount  of  the  plaintiff's  check  of  301 U.  19s.  7d.  given  for  this  bill.  It 
was  not  suggested  that  either  the  plaintiffs  or  defendants  had,  at  the  time 
of  the  discount,  knowledge  or  means  of  knowledge  that  the  bill  was  a  forg- 
ery. The  plaintiffs'  case  was  that,  they  having  given  the  money  for  an  ac- 
ceptance of  P.  &  C.  Van  Notten,  and  what  they  took  as  such  proving  not 
to  be  such  an  acceptance,  there  was  a  total  failure  of  consideration.  The 
defendants  contended  that,  the  endorsement  of  W.  B.  Anderson  being  genu- 
ine, and  there  being  recourse,  such  as  it  was,  on  that  endorsement  against 
his  estate,  the  instrument  was  to  some  extent  a  bill,  and  the  consideration 
for  the  money  had  not  in  point  of  law  totally  failed.  They  also  contended 
that  in  this  transaction  they  were  only  brokers,  acting  as  agents  for  W.  B. 
Anderson  ;  that  the  contract  was  between  Overend,  Gu?*ney  &  Co.  and  Ander- 
son ;  and  that  the  price  was  to  be  recovered  back,  if  at  all,  from  Anderson 
and  not  from  the  defendants.  On  this  latter  defence,  which  was  that  prin- 
cipally relied  on  at  the  trial,  evidence  was  given,  on  both  sides,  both  as  to 
the  general  course  of  business  of  money-dealers  and  bill-brokers  in  London, 
and  as  to  the  particular  transactions  between  those  two  firms  of  Overend, 
Gurney  &,  Co.  and  Womersley  &,  Burt. 

The  result  of  this  evidence  was  to  show  that  the  business  of  a  bill-broker, 
strictly  speaking,  that  is,  a  trade  confined  entirely  to  acting  as  agent  between 
the  holder  of  the  bill  wishing  to  get  it  discounted  and  the  capitalist  willing 
to  invest  his  money  in  the  discount  of  such  securities,  is  no  longer  known 
in  the  city ;  but  that  those  who  are  now  called  bill-brokers  are  also  money- 
dealers,  and  discount  bills  with  their  own  money.  When  a  money-dealer 
agrees  to  discount  a  bill,  it  is  the  usual  course  of  business  to  make  out  a 
ticket  of  the  discount,  which  states  the  name  of  the  customer,  the  day 
when  the  bill  will  become  due,  and  its  amount.  It  then  specifies  the 
amount  which  the  discount,  for  so  many  days  as  the  bill  has  to  run,  comes 
to  at  the  agreed  rate  of  discount,  and  the  amount  of  the  commission,  if 
there  is  any,  and  the  sum  which,  after  these  are  deducted,  balances  the 
amount  of  the  bill.  This  ticket  is  attached  to  the  money-dealer's  crossed 
check  for  the  balance  ;  which  check  is,  in  practice,  always  drawn  payable, 
not  to  any  particular  name,  but  to  a  number  or  bearer ;  and  the  check 
with  the  ticket  attached  is  given  to  the  customer.  IMost  money -dealers  at 
times  require  advances  for  themselves,  which  they  obtain  from  other  money- 


SECT.  I.]  GURNEY   V.   WOMERSLEY.  365 

dealers,  frequently  by  rediscounting  particular  bills,  which  the  borrowing 
money-dealer  endorses  to  the  person  making  the  advance ;  and  frequently 
by  depositing  a  considerable  number  of  bills  at  once  as  a  security  for 
cue  sum  advanced ;  *  in  which  case,  if  the  bills  do  not  bear  the  endorse- 
ment of  the  borrowing  money-dealer,  it  is  usual  for  him  to  give  a  written 
guarantee  that  the  bills  will  be  duly  honored.  But  it  is  also  usual  with 
money -dealers  and  bill-brokers,  when  a  customer  brings  a  bill  of  a  larger 
amount  than  it  is  convenient,  for  any  reason,  to  take  at  the  time,  fur  the 
money-dealer  and  bill-broker  to  endeavor  to  find  some  other  money-dealer 
•willing  to  discount  the  bill  on  the  strength  of  the  names  on  it,  without 
having  the  endorsement  or  guarantee  of  the  first  money -dealer.  If  he  suc- 
ceeds, the  customer  is  never  introduced  to  the  money-dealer  who  makes 
the  advance;  but  the  money-dealer  making  the  advance  makes  out  the 
discount  ticket  in  the  name  of  the  money-dealer  who  negotiates  the  trans- 
action with  him,  and  gives  his  check  to  him,  exactly  in  the  same  manner 
as  in  cases  in  which  the  latter  endorses  or  guarantees  the  bill ;  and  the 
intermediate  money-dealer  makes  out  to  the  customer  a  distinct  discount 
ticket,  in  which  sometimes  the  rate  of  the  discount  is  higher  than  that 
contained  in  the  first  ticket,  sometimes  there  is  in  addition  a  commission 
charged ;  sometimes  both ;  but  always  the  amount  of  the  check  which  is 
attached  to  it  is  less  than  the  check  received  from  the  money-dealer  who 
made  the  advance.  The  difference  forms  the  intermediate  money-dealer's 
remuneration  in  the  transaction ;  there  is  no  fixed  usage  as  to  its  amount. 
which  varies  according  to  the  state  of  the  money  market,  and  the  agree- 
ment of  the  parties. 

It  appeared  that  Anderson  had  had  real  dealings  with  P.  k  C,  Van  Xotten. 
and  had  previously  discounted  with  Womersley  &  Burt  several  of  their 
genuine  acceptances  for  comparatively  small  sums.  On  the  7th  October 
he  brought  to  them  three  genuine  such  acceptances  amounting  together 
to  3301/.  Is.  Womersley  &  Burt  had  laid  down,  as  a  rule  regulating  their 
business,  that  they  would  not  advance  money  on  any  one  transaction,  be- 
yond a  certain  limit,  which  this  sum  exceeded.  Instead  tlicrefore  of  dis- 
counting these  bills  themselves,  they  desired  Anderson  to  leave  them  with 
them.  The  three  bills  were  taken  to  Overend,  Gurncy  &  Co.  by  AVomcrs- 
ley  »fe  Burt.  Womersley  &  Burt  were  asked  if  they  would  endorse  or  guar- 
anty the  bills,  but  declined  to  do  so.  The  partner  in  the  firm  Overend, 
Gumey  <fe  Co.,  who  was  conducting  the  transaction,  observed  that  P.  Sz  C. 
Van  Notten  were  the  acceptors,  and  that  Overend,  Gumey  Sc  Co.  would 
discount  their  acccj)tance  at  5^  per  cent,  being  the  rate  at  which  the  Bank 
of  f^ngland  then  discounted  the  best  bills,  without  any  endorsement  or 
guarantee  from  Womersley  &  Burt,  and  jestingly  added  that,  for  an  extra 
half  per  cent,  they  would  agree  not  to  have  recourse  against  any  of  tho 
other  parties.  Accordingly,  the  discount  ticket  was  made  out  by  Overend, 
1  See  Haynes  v.  Foster,  2  C.  &  M.  237  ;    Foster  r.  Pearson,  1  C.  M.  k  W.  8i9. 


366  GURNEY   V.    WOMERSLEY.  [CHAP.  II. 

Gurney  &  Co.  to  Womersley  -i  Burt,  deducting  discount  at  the  rate  of 
5^-  per  cent  per  annum  for  the  time  these  bills  had  to  run;  and  Overend, 
Gurney  »fc  Co.'s  check  was  given  for  the  balance,  which  was  3285^.  2s.  8d. 
Womersley  &  Burt  made  out  a  separate  discount  ticket  from  them  to 
Anderson,  deducting  discount  at  the  rate  of  6  per  cent  per  annum,  and 
gave  him  their  check  for  3283^.  13s.  9c7.  The  difference  between  those  two 
checks,  viz.  \L  Ss.  lid.,  formed  the  remuneration  of  Womersley  &  Burt. 
After  this,  several  other  genuine  acceptances  of  P.  &  C.  Van  Notten  were 
discounted  for  Anderson  in  the  same  manner,  the  parties  assuming  tacitly 
that  the  transactions  were  on  the  same  footing  as  the  first.  In  each  case 
Overend,  Gurney  &  Co.  took  the  discount  which  at  the  time  was  the  Bank 
of  England  rate ;  and  Womersley  &  Burt  in  each  case  made  out  a  separate 
ticket  at  a  different  rate,  and  gave  their  own  check  to  Anderson.  All  these 
bills  were  duly  honored. 

On  the  17th  December,  when  the  forged  bill,  the  subject  of  this  action, 
was  brought,  Overend.  Gurney  &  Co.  made  out  the  ticket  at  the  rate  of 
5  per  cent,  in  the  name  of  Womersley  &  Burt,  and  gave  their  check  for  the 
balance,  viz.  301 K.  19s.  7d.  AVoraersley  &  Burt  made  out  the  ticket  from 
them  to  Anderson  at  the  rate  of  6  per  cent  discount,  and  also  charging  him 
^  per  cent  commission  on  the  amount  of  the  bill,  and  gave  him  their  check 
for  the  balance,  viz.  2989/.  2s.  5d.  ;  so  that  on  this  transaction  they  were 
to  receive  a  remuneration  of  22/.  17.:>'.  '2d.  On  each  of  these  occasions  the 
transaction  was  entered  in  Overend,  Gurney  &  Co.'s  books  as  a  discount  to 
Womersley  &  Burt,  and  in  Womersley  &  Burt's  books  as  a  discount  by 
Overend,  Gurney  &  Co.,  and  also  as  a  discount  to  Anderson. 

The  Lord  Chief  Justice  told  the  jury  that  a  person  who  gets  a  bill  dis- 
counted, if  he  does  not  endorse  or  guaranty  the  bill,  is  not  liable  for  the 
solvency  of  the  parties  to  the  bill ;  but  that,  if  it  turas  out  to  be  not  a 
genuine  bill,  he  is  liable,  as  there  is  a  complete  failure  of  consideration. 
He  told  the  jury  that  in  this  case  there  was  a  complete  f;iilure  of  considera- 
tion, and  directed  them,  if  they  thought  that  the  discount  was  a  transac- 
tion between  the  plaintiffs  and  the  defendants,  to  find  for  the  plaintiffs  ; 
but,  if  they  thought  it  a  transaction  between  the  plaintiffs  and  Anderson 
through  the  agency  of  the  defendants,  they  should  find  for  the  defendants. 
The  jury  found  for  the  plaintiffs. 

Bramwell  now  moved  for  a  rule  nisi  for  a  new  trial. 

Coleridge,  J.  I  am  of  opinion  that  there  should  be  no  rule.  First  as 
to  the  verdict  being  against  evidence.  My  Lord  Chief  Justice  is  not  dis- 
satisfied with  the  verdict;  and  there  certainly  was  ample  evidence  to  sup- 
port it ;  there  were  circumstances  well  worthy  of  consideration  the  other 
■way ;  of  which  that  which  made  the  strongest  impression  on  my  mind  was 
the  fact  that  there  were  some  bills  endorsed  or  guarantied  by  the  bill- 
brokers,  and  others  which  they  did  not  guaranty.  But  this  may  be  ex- 
plained by  reference  to  the  amount  of  the  bills,  or  the  credit  of  the  pai-ties 


SECT.  I.]  GURNEY  V.  WOMERSLEY.  367 

to  them.  I  therefore  think  that  the  verdict  should  not  be  disturbed  on 
the  ground  that  it  is  against  evidence. 

As  to  the  supposed  misdirection.  The  vendor  of  a  specific  chattel,  it  is 
not  disputed,  is  responsible  if  the  article  be  not  a  genuine  article  of  that 
kind  of  which  the  seller  represents  it  to  be.  And  the  question  raised  really 
is,  What  is  the  extent  of  the  want  of  genuineness  for  which  he  is  responsi- 
ble ]  AVitliout  laying  down  the  limits,  it  is  clear  to  me  that  this  case  fell 
much  within  them.  In  effect  here  the  defendants  said  to  the  plaintiffs, 
Will  you  take,  without  recourse  to  us,  this  bill  which  purports  to  bear  the 
acceptance  of  P.  &  C.  Van  Notten  1  By  doing  so  they  represented  it  to  be 
their  acceptance,  as  it  purported  to  be,  and  sold  it,  as  answering  that  de- 
scription. That  being  so,  the  case  is  not  so  strong  as  the  bar  of  brass  sold 
as  a  bar  of  gold,  mentioned  in  Gompertz  v.  Bartlctt,^  or  of  the  altered  navy 
bill  in  Jones  v.  Ryde.^ 

WiGHTMAN,  J.  There  was  abundant  evidence  that  the  defendants  acted 
as  ])nncipals  in  the  transaction  :  and  the  verdict  ought  not  to  be  disturbed 
on  that  point. 

As  to  the  other  point,  it  is  in  substance,  that  the  plaintiffs  really  ob- 
tained an  article  of  the  kind  which  the  defendants  professed  to  sell,  namely 
a  genuine  bill,  and  that  there  was  no  warranty  that  every  signature  on  the 
bill  was  genuine.  I  think  that  the  evidence  showed  that  the  defendants 
professed  to  sell  a  genuine  bill  accepted  by  P.  &  C.  Van  Notten.  It  was 
upon  the  genuineness  of  that  acceptance  that  the  plaintiffs  entirely  relied 
for  their  security.  That  being  so,  I  cannot  distinguish  this  case  from  those 
referred  to  by  my  Brother  Coleridge.  In  considering  whether  a  defect  in 
an  article  renders  it  not  an  article  of  the  kind  of  which  it  was  represented 
to  be  on  the  sale,  or  is  merely  a  breach  of  a  collateral  warranty,  much 
must  depend  upon  the  special  circiunstances  and  terms  of  the  rule.  Here 
I  think  that  the  bill,  not  being  an  acceptance  of  P.  it  C.  Van  Notten,  fails 
in  what  was  the  substance  of  the  description  by  which  it  was  held. 

My  Brother  Erle,  who  has  left  the  court,  authorizes  me  to  say  that  he 
concurs. 

Lord  Campbell,  C.  J.  T  agree  that  no  rule  should  be  granted  in  this 
case.  The  verdict  of  the  jury  finds  that,  in  cases  of  this  sort,  in  London, 
when  a  bill-broker  takes  a  bill  to  a  capitalist,  and  gets  it  discounted,  the 
transaction  is  between  the  capitalist  and  the  bill-broker,  and  not  between 
the  capitalist  and  the  bill-broker's  customer.  And,  so  far  from  being 
against  evidence,  the  verdict  was  founded  on  evidence  to  my  mind  justify- 
ing no  other  conclusion.  There  is,  in  practice,  one  advice  note  or  dis- 
count ticket  made  out  between  the  capitalist  and  the  bill-broker,  and 
another  made  out  between  tlie  l)ill  broker  and  the  customer.  The  rates 
of  interest  at  which  the  bill  is  discounted  are  dilVorent,  and  boar  no  fixed 
relation  to  each  other;  and  it  is  quite  inunutoiiul  to  tlio  customer  wlicthcr 
1  2  E.  &  15.  854,  E.  C.  L.  W.  vo!.  i:,.         "  5  T;niiit    188,  K.  C.  L.  \l.  vol.  1. 


368  EICHHCLZ   V.   BANNISTEK.  [CIIAP.  II. 

the  bill-broker  takes  the  bill  because  he  has  got  funds  of  his  own  which  he 
is  willing  to  invest  in  discounting  it,  or  because  he  has  found  a  capitalist 
■willing  to  discount  it  on  terms  that  will  leave  him  a  profit.  In  this  case, 
th3  fact  that  there  were  distinct  and  separate  contracts,  one  between  the 
plaintiffs  and  the  defendants,  and  the  other  between  the  defendants  and 
Anderson,  seems  to  me  established  most  clearly. 

As  to  the  other  objection  ;  I  am  of  opinion  that,  though  the  defendants, 
by  not  endorsing  or  guarantying  the  bill,  preserved  themselves  from  wai'- 
ranting  the  solvency  of  any  of  the  parties,  yet  they  did  undertake  that  the 
instrument  was  what  it  purported  to  be.  It  is  not  disputed  that  in  fact 
the  discount  of  their  bill  by  the  plaintiffs  was  solely  on  the  faith  of  its 
being  an  acceptance  of  P.  &  C.  Van  Notten,  which  it  was  not ;  and  in  con- 
sequence of  its  being  so  it  was  valueless.  The  possibility  of  recourse  against 
the  estate  of  Anderson,  a  convict  and  a  bankrupt,  did  not  prevent  there 
being  a  total  failure  of  consideration.  J^ule  refused. 

Bramu'ell,  on  a  subsequent  day  (November  9),  moved  ^  for  leave  to  ap- 
peal, under  the  Common  Law  Procedure  Act,  1854,^  on  the  point  as  to  mis- 
direction. He  expressed  some  doubt  whether,  under  this  Act,  the  Court 
would  grant  leave  to  appeal  on  an  ex  parte  application,  or  only  grant  a  rule 
nisi  so  as  to  enable  the  opposite  party  to  resist  the  application. 

Cur.  adv.  vidt. 

Lord  Campbell,  C.  J.,  on  a  subsequent  day  (November  15),  said  that, 
after  the  repeated  decisions,  the  court  thought  it  must  be  considered  settled 
law,  that  the  plaintiffs  were,  under  such  circumstances,  entitled  to  recover 
the  money  paid,  as  paid  on  a  consideration  which  had  failed.  That  being 
so,  the  court,  on  consideration,  thought  that  it  ought  not  in  a  sound  exer- 
cise of  its  discretion  to  give  leave  to  appeal.  Leave  refused. 


EICHHOLZ   V.  BANNISTER. 

In  the  Common  Pleas,  November  17,  1864. 

[Reported  in  17  Common  Bench  Reports,  New  Series,  708.] 

>  This  was  an  action  for  money  payable  by  the  defendant  to  the  plaintiff 
for  money  received  by  the  defendant  for  the  use  of  the  plaintiff,  for  money 
paid  by  the  plaintiff  for  the  defendant  at  his  request,  and  for  money  found 
to  be  due  from  the  defendant  to  the  plaintiff  on  accounts  stated;  Claim,  19^. 
Plea,  never  indebted,  whereupon  issue  was  joined. 

The  cause  was  tried  in  the  court  of  record  for  the  trial  of  civil  actions 
within  the  city  of  Manchester,  before  the  deputy  recorder,  when  the  facts 

1  Before  Lord  Campbell,  C.  J.,  Coleridge,  Wightman,  and  Erle,  JJ. 
a  17  &  18  Yict.  c.  125,  §  35. 


SECT.  I.]  EICniIOLZ   v.   BANNISTER.  369 

which  appeared  in  evidence  were  as  follows :  —  The  plaiutifiF  was  a  commission- 
agent  at  Manchester.  The  defendant  was  a  job-warehouseman  in  the  same 
place.  On  the  18th  of  April  last,  the  plaintiff  went  to  the  defendant's 
warehouse,  and  there  saw,  among  other  goods  which  the  defendant  had  just 
purchased,  17  pieces  of  prints,  which  he  offered  to  buy  of  him  at  5\(l.  a 
yard.  After  some  discussion,  the  defendant  agreed  to  sell  them,  and  gave 
the  plaintiff  an  invoice  in  the  following  form,  the  whole  of  which  was  printed, 
with  exception  of  the  parts  in  italics  :  — 

21  Choulton  Street,  PonTLAXD  Stueet, 
Mancuestek.     April  IStli,  1864. 
Mr.  Eichhoh 

Bought  of  E.  Bannister,  Job-warehouseman 

Prints,  Fents,  Grey  Fustians,  &c.     Job  and  perfect   Yarns  in    Hanks, 
Cops,  and  Bundles. 

\1  pieces  of  prints,  52  yds.  at  b\d.  £19     0     0 

1  ^  per  cent  for  cash  6     0 

£18  U     0 


The  plaintiff  paid  for  the  goods  before  he  left  the  warehouse,  and  the 
defendant  sent  them  by  a  porter  to  the  plaintiff's  place  of  business.  The 
plaintiff  sold  the  lot  a  few  days  afterwards  for  19/.  lo^.  net.  The  goods 
were  subsequently  returned  to  the  plaintiff,  they  having  been  recognized 
as  goods  which  had  been  stolen  from  the  premises  of  one  Krauss.  The 
goods  were  taken  possession  of  by  the  police,  and  the  thief,  one  Aspinall, 
was  tried  at  the  general  quarter  sessions  of  the  peace  holden  in  and  for  the 
City  of  Manchester  on  the  9th  of  May  last,  and  convicted,  and  sentenced 
to  penal  servitude  for  four  years. 

On  the  part  of  the  defendant,  it  was  objected  that  there  was  no  case  to 
go  to  the  jury,  inasmuch  as  there  is  no  implied  warranty  of  title  on  the 
sale  of  goods. 

For  the  plaintiff  it  was  insisted  that  he  was  entitled  to  recover,  the  money 
having  been  paid  upon  a  consideration  which  had  wholly  failed. 

The  learned  judge  directed  a  verdict  to  be  entered  for  the  plaintiff  for 
the  amount  claimed,  reserving  leave  to  the  defendant  to  move  to  set  aside 
the  verdict  and  enter  a  nonsuit  or  a  verdict  for  the  defendant,  if  the  court 
should  be  of  opinion  that  the  plaintiff  was  not  entitled  to  recover. 

Ilolker,  on  a  former  day  in  this  term,  obtained  a  rule  nisi  accordingly. 
He  referred  to  Crosse  v.  Gardner;^  Pasley  v.  Freeman  ]'^  Morlcy  v.  Atten- 
borough,'  and  Hall  v.  Condor.* 

C.  Pollock  now  showed  cause.  The  question  is,  whether  there  is  any 
implied  warranty  of  title  upon  a  sale  of  goods.     That  there  is  such  warranty 

1  Caith.  00.  2  3  T.  R.  51.  "  3  Kx.  500. 

*  2  C.  B.  K.  s.  22,  40  (!■:.  C.  L.  R.  vol.  89). 

24 


370  EICHHOLZ   V.   BANNISTER.  [CHAP.  II. 

according  to  the  Roman,^  the  French,'^  the  American,^  the  Scotch,  and  almost 
every  hiw  of  the  continent  of  Europe,  is  clear :  and  there  are  not  wanting 
authorities  to  show  that  it  is  so  in  the  law  of  this  country.  "  By  the  civil 
law,"  says  Blackstone,*  "  an  implied  warranty  was  annexed  to  every  sale,  in 
respect  of  the  title  of  the  vendor ;  and  so,  too,  in  our  law,  a  purchaser  of 
goods  and  chattels  may  have  a  satisfaction  from  the  seller,  if  he  sells  them 
as  his  own,  and  the  title  proves  deficient,  without  any  express  warranty  for 
that  purpose."  In  Crosse  v.  Gardner,^  the  plaintiff  declared  quod  cum  (on 
such  a  day)  colloquium  fuit  between  the  plaintiff  and  the  defendant  con- 
cerning the  buying  and  selling  two  oxen,  which  the  defendant  then  had  in 
his  possession,  and  he  (the  defendant)  adtunc  el  ibidem  falsa  et  malitiose 
ajirmabat  that  those  oxen  were  his  (the  defendant's)  proper  goods,  to  which 
the  plaintiff  giving  credit  bought  the  said  oxen  of  the  defendant  for  so 
much  money,  when  in  truth  the  said  oxen  then  were  the  proper  goods  of 
T.  S.,  and  that  he  the  said  T.  S.  postea,  etc.,  lawfully  recovered  the  said 
oxen  from  the  plaintiff,  and  licet  (the  defendant)  scepius  reqidsit  fait,  yet  he 
refused  to  give  the  plaintiff  satisfaction  for  the  same.  Upon  motion  in 
arrest  of  judgment  it  was  contended  that  the  declaration  was  ill,  because 
the  plaintiff  had  not  alleged  that  the  defendant  (sciens  that  these  were  the 
oxen  of  T.  S.)  did  affirm  them  to  be  his  oxen,  nor  allege  this  to  be  done 
deceptive,  nor  set  forth  any  wairanty,  but  generally  that  the  defendant  did 
affirm  these  to  be  his  (the  defendant's)  oxen,  which  was  not  sufficient  to 
maintain  the  action,  because  a  man  may  be  mistaken  in  his  property  and 
right  to  a  thing,  without  any  fraud  or  ill  intent.  But  the  court  held  that 
the  action  would  lie  upon  a  bare  affirmation,  nt  svpra,  — referring  to  Harvey 
V.  Young,®  Bosden  v.  Thinne,'  Furnis  v.  Leicester,*  Leakins  v.  Clissel,^  and 
Ekins  V.  Tresham.^°  In  Medina  v.  Stoughton,"  it  was  held  that  an  action 
lies  against  the  seller  of  goods  for  affirming  them  at  the  time  of  the  sale 
to  be  his  own,  when  they  were  not,  if  he  was  in  possession  of  them  at  the 
time  of  the  sale;  and  that  it  is  no  answer  that  he  bought  them  bona  fde,  and 
believed  them  to  be  his.  Offering  to  sell  generally  is  sufficient  evidence  of 
offering  to  sell  as  owner :  per  Lee,  C.  J.,  in  Ryall  v.  Ilowles.^^  And  see  the 
judgment  of  Buller,  J.,  in  Pasley  v.  Freeman. ^^  In  Morley  v.Attenborough,^* 
although  the  conclusion  arrived  at  by  the  court  is,  that  there  is  no  implied 
warranty  of  title  in  the  conti-act  of  sale  of  a  personal  chattel,  yet  many  of 
the  authorities  referred  to  in  the  judgment  delivered  by  Parke,  B.,  sustain 
the  present  argument ;  and  the  decision  may  well  be  warranted  by  the 

1  Cod.  lib.  8,  tit.  45.     Dig.  lib.  21,  tit.  2. 

2  Code  Civil,  art.  1626.     Tioplong,  Ch.  4,  De  la  Yente. 

8  Armstrong  v.   Percy,  5  Wend.  535  ;  Blasdale  v.  Babcock,  1  Johns.  517  ;  Sedgwick 
on  Damages,  2d  Ed.  293  ;  2  Kent's  Commentaries,  478. 

*  2  Bl.  Com.  451.  °  Carth.  90.  ^  yelv.  20.  ">  Yelv.  40. 

8  Cro.  Jac.  474,  1  Roll.  Abr.  91.  »  1  Sid.  146.  l«  1  Lev.  102. 

"  1  Ld.  Raym.  593,  Salk.  210.  "  i  Ves.  348,  351.  "  3  T.  R.  56,  57. 

w  3  Ex.  500. 


SECT.  L]  EICHHOLZ  V.   BANNISTER.  371 

circumstance  of  the  vendor  being  a  pawnbroker  and  the  subject  of  sale  an 
unredeemed  pledge.  "  With  respect  to  executory  contracts  of  purchase 
and  sale,"  says  that  learned  judge,  "  where  the  subject  is  unascertained, 
and  is  afterwards  to  be  conveyed,  it  would  probably  be  implied  that  both 
parties  meant  that  a  good  title  to  that  subject  should  be  transferred,  in  the 
same  manner  as  it  would  be  implied,  under  similar  circumstances,  that  a 
merchantable  article  was  to  be  supplied.  Unless  goods  which  the  party 
could  enjoy  as  his  own,  and  make  full  use  of,  were  delivered,  the  contract 
would  not  be  performed.  The  purchaser  could  not  be  bound  to  accept  if 
he  discovered  the  defect  of  title  before  delivery;  and,  if  he  did,  and  the 
goods  were  recovered  from  him,  he  would  not  be  bound  to  pa}',  or,  having 
paid,  he  would  be  entitled  to  recover  back  the  price,  as  on  a  consideration 
which  had  failed.  But,  when  there  is  a  bargain  and  sale  of  a  specific  as- 
certained chattel,  which  operates  to  transmit  the  property,  and  nothing  is 
said  about  title,  what  is  the  legal  effect  of  that  contract]  Does  the  contract 
necessarily  import,  unless  the  contrary  be  expressed,  that  the  vendor  has  a 
good  title  1  or,  has  it  merely  the  effect  of  transmitting  such  title  as  the 
vendor  has  1  According  to  the  Roman  law,^  and  in  France, '^  and  Scotland, 
and  partially  in  America,'  there  is  always  an  implied  contract  that  the 
vendor  has  the  right  to  dispose  of  the  subject  which  he  sells  ;  *  but  the 
result  of  the  older  authorities  is,  that  there  is  by  the  law  of  England  no 
warranty  of  title  in  the  actual  contract  of  sale,  any  more  than  there  is  of 
quality.  The  rule  of  caveat  emptor  applies  to  both  ;  but,  if  the  vendor 
knew  that  he  had  no  title,  and  concealed  that  fact,  he  was  always  held 
responsible  to  the  purchaser  as  for  a  fraud,  in  the  same  way  that  he  is  if  he 
knew  of  the  defective  quality.  This  rule  will  be  found  in  Co.  Litt.  102  a, 
3  Rep.  22  a;  Xoy's  Maxims,  42;  Fitz.  Nat.  Brev.  94  C. ;  in  Sprigwell  v. 
Allen,*  cited  by  Littledale,  J.,  in  Early  v.  Garrett,^  and  in  Williamson  v. 
Allison,^  referred  to  in  the  argument.  Lord  Hale  says,  'Though  the  words 
assign,  set  over,  and  transfer,  do  not  amount  to  a  covenant  against  an  eigu 
title,  yet  as  against  the  covenantor  himself,  it  will  amount  to  a  covenant 
against  all  claimiTig  under  him  ;'  Deering  v.  Farrington.®  It  may  be,  that 
as  in  the  earlier  times  the  chief  transactions  of  purchase  and  sale  were  in 
markets  and  fairs,  where  the  bona  fide  purchaser,  without  notice,  obtained 
a  good  title  as  against  all  except  the  Crown  (and  afterwards  a  prosecutor  to 
whom  restitution  is  ordered,  by  the  21  H.  8,  c.  11),  the  common  law  did  not 
annex  a  warranty  to  any  contract  of  sale.  Bo  that  as  it  may,  the  older 
authorities  are  strong  to  show  that  there  is  no  such  warranty  implied  by 

«   Vide  Dotnat,  Rook  1,  tit.  2,  §  2,  nrt.  3.  «  Code  Civil,  c\\.  4,  §  1,  art.  1603. 

8  TivSwnt:  V.  Tnuiii>ir,  1  Johns,  \iv\t.  274;  Broom's  Maxims,  628,  wliere  this  subject 
is  well  (Hscussfd. 

*  Bell  on  Kale,  04.  »  Aleyn,  91. 

•  9  B.  &  C.  932  (E.  C.  L.  R.  vol.  17)  4  M.  &  U.  687.  ^  o  Ea.st,  409. 
8  3  Keb.  304. 


372  EICHHOLZ  V.    BANNISTER.  [CHAP.  11. 

law  from  the  mere  sale.  In  recent  times  a  different  notion  appears  to  have 
been  gaining  ground  (see  note  of  the  learned  editor  to  3  Rep.  22a);  and 
Mr.  Justice  Blackstone  says,  '  In  contracts  for  sale  it  is  constantly  under- 
stood that  the  seller  undertakes  that  the  commodity  he  sells  is  his  own  ; ' 
and  Mr.  Wooddesou,  in  his  Lectures/  goes  so  far  as  to  assert  that  the  rule 
of  caveat  emptor  is  exploded  altogether,  which  no  authority  warrants.  At 
all  times,  however,  the  vendor  was  liable  if  there  was  a  warranty  in  fact ; 
and,  at  an  early  period,  the  affirming  those  goods  to  be  his  own  by  a  vendor 
in  possession,  appears  to  have  been  deemed  equivalent  to  a  warranty.  Lord 
Holt,  in  Medina  v.  Stoughton,^  says  that,  '  where  one  in  possession  of  a 
personal  chattel  sells  it,  the  bare  affirming  it  to  be  his  own  amounts  to  a 
warranty  ; '  and  Mr.  Justice  Buller,  in  Pasley  v.  Freeman,^  disclaims  any 
distinction  between  the  effect  of  an  affirmation,  when  the  vendor  is  in  pos- 
session or  not,  treating  it  as  equivalent  to  a  warranty  in  both  cases.  Some 
of  the  text-writers  drop  the  expression  of  '  warranty '  or  '  affirmation,'  and 
lay  down  in  general  terms,  that,  if  a  man  sells  goods  as  his  own,  and  the 
title  is  deficient,  he  is  liable  to  make  good  the  loss ;  *  the  commentator  cites 
for  that  position  Furnis  v.  Leicester,^  in  both  which  cases  there  was  an 
allegation  that  the  vendor  affirmed  that  he  had  a  title,  and  therefore  it 
would  seem  that  the  learned  atithor  treated  the  expression  '  selling  as  his 
own '  as  equivalent  to  an  affirmation  or  warranty.  So,  Chancellor  Kent, 
in  2  Comm.  478,  says,  that,  '  in  every  sale  of  a  chattel,  if  the  possession 
be  in  another,  and  there  be  no  covenant  or  warranty  of  title,  the  rule  of 
caveat  emptor  applies,  and  the  party  buys  at  his  peril ;  but  if  tiie  seller 
has  possession  of  the  article,  and  he  sells  it  as  his  own,  and  for  a  fair  price, 
he  is  understood  to  warrant  the  title.'  From  the  authorities  in  our  law, 
to  which  may  be  added  the  opinion  of  the  late  Lord  Chief  Justice  Tindal, 
in  Ormrod  v.  Huth,®  it  would  seem  that  there  is  no  implied  warranty  of 
title  on  the  sale  of  goods,  and  that,  if  there  be  no  fraud,  a  vendor  is  not 
liable  for  a  bad  title,  unless  there  is  an  express  warranty,  or  an  equivalent 
to  it,  by  declarations,  or  conduct ;  and  the  question,  in  each  case,  where 
there  is  no  warranty  in  express  terms,  will  be,  whether  there  are  such  cir- 
cumstances as  to  be  equivalent  to  such  a  warranty.  Usage  of  trade,  if 
proved  as  a  matter  of  fact,  would,  of  course,  be  sufficient  to  raise  an  infer- 
ence of  such  an  engagement ;  and,  without  pi'oof  of  such  usage,  the  very 
nature  of  the  trade  may  be  enough  to  lead  to  the  conclusion  that  the  person 
carrying  it  on  must  be  understood  to  engage  that  the  purchaser  shall  enjoy 
that  which  he  buys,  as  against  all  persons.  It  is,  perhaps,  with  reference 
to  such  sales,  or  to  executory  contracts,  that  Blackstone  makes  the  statement 
above  referred  to.  We  do  not  suppose  that  there  would  be  any  doubt,  if  the 
articles  were  bought  in  a  shop  professedly  carried  on  for  the  sale  of  goods, 
that  the  shopkeeper  must  be  considered  as  warranting  that  those  who  pur- 

J  Vol.  2,  p.  415.  '^  1  Salk.  210;  Ld.  Raym.  593.  »  3  T.  R.  57. 

4  2  Bl.  Com.  451.         ^  Cio.  Jac.  474,  aud  1  Roll.  Abr.  70.        6  14  M.  &  W.  664. 


SECT.  I.]  EICHHOLZ   V.   BANNISTER.  373 

chase  will  have  a  good  title  to  keep  the  goods  purchased.  In  such  a  case, 
the  vendor  sells  'as  his  own,'  and  that  is  what  is  equivaleut  to  a  warranty 
of  title.  But,  in  the  case  now  under  consideration,  the  defendant  can  be  made 
responsible  only  as  on  a  sale  of  a  forfeited  pledge,  eo  nomine.  The  vendor 
must  be  considered  as  selling  merely  the  right  to  the  pledge  which  he  him. 
self  had."  There  is  nothing  in  that  judgment  to  militate  against  the  claim 
of  the  plaintiff  here.  The  circumstance  of  a  tradesman  selling  goods  in  a 
public  shop  is  a  representation  to  all  the  world  that  that  which  he  is  selling 
is  his  own  property.  In  Chapman  v.  Speller,^  the  defendant  at  a  sheriff's 
sale  bought  goods  from  the  sheriff  for  18/.  ;  the  plaintiff,  who  was  also  at 
the  sale,  bought  the  defendant's  bargain  of  him  for  5/,,  and  paid  him  the 
23/. ;  the  defendant  paid  the  sheriff  the  18/.,  and  the  sheriff  began  to  deliver 
the  goods  to  the  jilaintiff,  but  they  were  then  claimed  as  not  being  the 
property  of  the  executi(,ni-debtor,  and  were  recovered  by  the  true  owner ; 
and,  in  an  action  upon  an  alleged  warranty  that  the  vendor  (the  defendant) 
had  title  to  sell,  it  was  held  that  there  was  no  implied  warranty  by  the 
defendant  that  he  had  title,  nor  any  failure  of  consideration,  —  the  plaintiff 
having  paid  the  23/.  to  the  defendant,  not  for  the  goods,  but  for  the  right 
which  the  defendant  had  acquired  by  his  purchase,  and  this  consideration 
not  having  failed.  But,  in  delivering  judgment,  Patteson,  J.,  says:  "In 
deciding  for  the  defendant  under  these  circumstances,  we  wish  to  guard 
against  being  supposed  to  doubt  the  right  to  recover  back  money  paid  upon 
an  ordinary  purchase  of  a  chattel,  where  the  purchaser  does  not  have  that 
for  wluch  he  paid."  In  Sims  v.  I^Iarryat,^  Lord  Campbell,  in  delivering 
judgment,  says,  obiter,  —  "I  do  not  think  it  necessary  to  inquire  what  the 
law  would  be  in  the  absence  of  an  express  warranty.  On  that  point  the 
law  is  not  in  a  satisfactory  state.  The  decision  in  Morley  v.  Attenborough  ' 
was,  that  a  pawnbroker,  selling  an  unredeemed  pledge  as  such,  did  not 
warrant  the  title  of  the  pawnor.  Of  that  decision  I  approve ;  but  a  great 
many  questions,  beyond  the  mere  decision,  arise  on  the  very  able  judgment 
of  the  learned  Baron  in  that  case,  which  I  fear  must  remain  open  to  con- 
troversy. It  may  be  that  the  learned  Baron  is  correct  in  saying,  that,  on 
a  sale  of  personal  property,  the  maxim  of  caveat  emptor  docs  by  the  law  of 
England  apply  ;  but,  if  so,  there  are  many  exceptions  stated  in  the  judgment 
which  well  nigh  eat  up  the  rule.  Executory  contracts  are  said  to  be  ex- 
cepted ;  so  are  sales  in  retail  shops,  or  where  there  is  a  usage  of  trade ;  so 
that  there  may  be  difficulty  in  finding  cases  to  which  the  rule  would  prac- 
tically apply."  [Kklk,  ('.  J.,  referred  to  Noy's  Maxims,  c.  42,  p.  89,*- 
where  it  is  said,  "If  1  take  the  horse  of  another  man,  and  sell  him,  and 
the  owner  take  him  again,  I  may  have  an  action  of  debt  for  the  money  ;. 
for  the  bargain  was  perfect  by  the  delivery  of  the  horse ;  and  caveat  emptory^ 
That  can  hardly  be  considered  law  at  this  day. 

1  14  Q.  P..  C'21  (F,.  f.  f-.  l;.  vol.  G8).  »  17  Q.  B.  281,  290  (E.  C.  L.  R.  vol.  79). 

8  3  Ex.  500.  *  Bythewood's  E<I.  209. 


374  EICHHOLZ  V.   BANNISTER.  [CHAP.  II. 

Holker,  in  stipport  of  his  rule.  The  real  question  is,  whether  there  is  a 
warranty  of  title  to  goods  sold  in  a  shop  or  warehouse ;  or,  in  other  words, 
whether  the  money  which  the  buyer  has  paid  for  them,  can,  if  the  vendor 
turns  out  to  have  no  title,  be  recovered  back  as  upon  a  failure  of  considera- 
tion. As  a  general  rule,  there  is  by  the  law  of  England,  whatever  may  be 
the  law  of  other  commercial  countries,  no  implied  warranty  of  title  on  the 
sale  of  a  chattel.  The  law  is  the  same  with  respect  to  warranty  of  title 
to  land  as  of  title  to  goods.  [Byles,  J.  Chancellor  Kent,  in  his  Commen- 
taries,^ states  the  contrary  to  be  the  law  of  England  as  vrell  as  that  of 
America.]  The  English  authorities  he  refers  to,^  with  the  exception  of  the 
passage  in  Blackstone,  do  not  bear  him  out.  The  rule  is  clearly  laid  down 
by  TiNDAL,  C.  J.,  in  Ormrod  v.  Huth  :  ^  "  The  rule  which  is  to  be  derived 
from  all  the  cases  appears  to  us  to  be,  that  where  upon  the  sale  of  goods 
the  purchaser  is  satisfied  without  requiring  a  warranty  (wliich  is  a  matter 
for  his  own  consideration),  he  cannot  recover  upon  a  mere  representation 
of  the  quality  by  the  seller,  unless  he  can  show  that  the  representation  was 
bottomed  in  fraud.  If  indeed,  the  representation  was  false  to  the  knowledge 
of  the  party  making  it,  this  would  in  general  be  conclusive  of  fraud ;  but, 
if  the  representation  was  honestly  made,  and  believed  at  the  time  to  be  true 
by  the  party  making  it,  though  not  true  in  point  of  fact,  we  think  this  does 
not  amount  to  fraud  in  law,  but  that  the  rule  of  caveat  emj^tor  applies,  and 
the  representation  itself  does  not  furnish  a  ground  of  action.  And,  although 
the  cases  may,  in  appearance,  raise  some  difference  as  to  the  eflFect  of  a  false 
assertion  or  representation  of  title  in  the  seller,  it  will  be  found,  on  exami- 
nation, that  in  each  of  those  cases  there  was  either  an  assertion  of  title 
embodied  in  the  contract,  or  a  representation  of  title  which  was  false  to  the 
knowledge  of  the  seller."  That,  it  is  submitted,  is  a  correct  exposition  of 
the  law  upon  the  subject ;  and  it  has  never  been  questioned.  Almost  all 
the  authorities  are  referred  to  and  commented  upon  in  Morley  v.  Atten- 
borough;  and  the  result  arrived  at  is,  that,  by  the  common  law  of  England, 
there  is  no  implied  warranty  of  title  from  the  mere  contract  of  sale  of  a 
chattel.  The  doctrine  is  still  further  carried  out  in  Hall  v.  Conder,^  where 
Williams,  J.,  in  delivering  the  judgment  of  the  court,  says  :  "  With  regard 
to  the  sale  of  ascertained  chattels,  it  has  been  held  that  there  is  not  any 
implied  warranty  of  either  title  or  quality,  unless  there  are  some  circum- 
stances beyond  the  mere  fact  of  a  sale,  from  which  it  may  be  implied.  The 
law  on  this  suV)ject  was  very  fully  explained  by  Parke,  B.,  in  giving  the 
judgment  of  the  Court  of  Exchequer  in  Morley  v.  Attenborough."  [Erle,  C.  J. 
In  both  those  cases,  the  dicta  you  rely  on  were  extra-judicial,  not  necessary 

'  Vol.  2,  p.  478. 

2  2  Bl.  Com.  451  ;  Bacon's  Abridgment,  Actions  on  the  Case  (E)  ;  Comyn  on 
Contracts,  Part  3,  c.  8  ;  Stuart  v.  "Wilkins,  Dougl.  18,  and  Parkinson  v.  Lee,  2  East, 
314. 

8  14  M.  &  W.  651,  664.  *  2  C.  B.  N.  s.  22,  40  (E.  C.  L.  R.  vol.  89). 


SECT.  l]  EICHHOLZ   V.    BANNISTER.  375 

to  the  determination  of  the  question  in  issue.]     They  are,  at  all  events, 
strong  expressions  of  opinion.     [Erle,  C.  J.    Very.]     In  a  note  to  William- 
son V.  Allison,*  the  following  MS.  note  of  Sprigwell  v.  Allen,^  by  Burnet,  J., 
is  given :  "  In  an  action  on  the  case  for  selling  a  horse  as  the  defendant's 
own,  when  in  truth  it  was  the  horse  of  A.  B.,  upon  not  guilty  pleaded,  it 
appeared  that  the  defendant  bought  the  horse  in  Smithfield,  but  did  not 
take  care  to  have  him  legally  tolled  ;  yet,  as  the  plaintiff  could  not  prove 
that  the  defendant  knew  it  to  be  the  horse  of  A.  B.,  the  plaintiff  was  non- 
suited ;  for,  the  scienter  or  fraud  is  the  gist  of  the  action  where  tliere  is  no 
warranty;  for  there  the  party  takes  upon  himself  the  knowledge  of  the 
title  to  the  horse  and  of  his  qualities."     The  note  goes  on,  —  "  See  also 
Chandler  v.  Lopus,  in   the    Exchequer   Chamber,'   to  the  same  purpose. 
The  same  MS.  also  refers  to  another  case  :  '  So,  if  a  man  sell  six  blank  lot- 
tery tickets,  and  afterwards  another,  as  owner  of  these    tickets,  recover 
them  of  the  vendee,  unless  the  vendor  knew  them  to  be  the  property  of 
another,  or  warranted  them,  neither  this  action  (under  the  title  Case  of 
torts  in  nature  of  deceit  and  other  wrongs)  nor  assumpsit  for  money  had 
and  received  to  the  vendee's  use  will  lie.     Per  Holt,  C.  J.,  Paget  v.  Wilkin- 
son.' *    And  see  Denison  v.  Ralphson,^  where  an  opinion  is  given  on  the  very 
point  in  question ;  for,  on  the  second  count,  which  stated  a  warranty  that 
the  goods  sold  were  good  and  merchantable,  and  averred  that  the  defendant 
delivered  them  bad  and  not  merchantable,  knowing  them  to  be  naught,  the 
court  observe,  that,  though  the  declaration  be  'knowing  them  to  be  naught,' 
yet  the  knowledge  need  not  be  proved  in  evidence."     [Eule,  C.  J.     If  I 
sell  an  article  as  my  article,  is  not  that  a  contract  that  the  article  is  njinc? 
Has  any  court  decided,  that,  under  such  circumstances,  1-he  money  paid  is 
not  recoverable  back,  if  it  turn  out  that  the  seller  has  no  title?]     In 
Walker's  Case,"  it  is  laid  down,  that,  "  if  a  man  sell  goods  for  money  to  be 
paid  at  several  days,  in  such  case,  although  the  goods  be  taken  by  one  who 
hath  right  before  the  day,  yet  the  seller  shall  have  an  action  of  debt  in 
respect  of  the  contract."     To  which  is  added  in  the  note,  —  "And,  unless 
the  seller  knew  the  goods  to  be  the  property  of  another,  or  warranted  them, 
the  buyer  must  bear  the  loss;  for,  the  rule  is,  caveat  emptor"  —  citing  1  Inst. 
102a;  2  Inst.  247.     [Erle,  C.  J.     That  is  merely  talking,  not  adjudging.] 
In  Early  v.  Garrett,'  Littledalk,  J.,  says:  "It  has  been  liold,  tliat,  wlicro 
a  man  sells  a  horse  as  his  own,  when  in  truth  it  is  the  horse  of  another, 
the  purchaser  cannot  maintain  an  action  against  the  seller,  unless  ho  can 
show  that  the  seller  knew  it  to  be  the  horse  of  the  other  at  the  time  of  the 
sale,  —  the  scienter  or  fraud  being  the  gist  of  tlie  action  where  there  is  no 
warranty,  for  there  the  party  takes  upon  himself  the  knowledge  of  the  title 
to  the  horse,  and  of  his  qualities."     [Erle,  C.  J.,  referred  to  Brown  v. 

1  2  East,  448.  *  Alcyn,  91.  »  C'ro.  Jnr.  4. 

*  Tr.  8  W.  3,  Guil.ll.nll.  *  1  Veiitr.  3C6.  «  3  Co.  n.p.  12a. 

7  9  B.  &  C.  928  (K.  C.  L.  11.  vol.  17);  4  M.  &  H.  C87. 


376  EICHHOLZ  V.   BANNISTER.  [CITAP.  II. 

Edgington.^]  In  Broom's  Legal  Maxims,"  the  result  of  the  authorities, 
ancient  and  modern,  is  tlius  summed  up  :  "  Upon  the  whole,  we  may 
safely  conclude,  that,  with  regard  to  the  sale  of  ascertained  chattels,  there 
is  not  any  implied  warranty  of  either  title  or  quality,  unless  thei'e  are  some 
circumstances  beyond  the  mere  fact  of  a  sale,  from  which  it  may  be  implied." 
The  mere  fact  of  the  sale  taking  place  in  a  shop  surely  cannot  make  any 
difference.  As  to  the  failure  of  consideration,  that  raises  very  nearly  the 
same  question.  "  It  may  be,"  says  Parke,  B.,  in  Morley  v.  Attenborough,^ 
"that,  though  there  is  no  implied  warranty  of  title,  so  that  the  vendor 
would  not  be  liable  for  a  breach  of  it  to  unliquidated  damages,  yet  the 
purchaser  may  recover  back  the  purchase-money,  as  on  a  consideration  that 
failed,  if  it  could  be  shown  that  it  was  the  understanding  of  both  parties 
that  the  bargain  should  be  put  an  end  to  if  the  purchaser  should  not 
have  a  good  title.  But,  if  there  is  no  implied  warranty  of  title,  some 
circumstances  must  be  shown  to  enable  the  plaintiff  to  recover  for 
money  had  and  received."  In  the  present  case,  the  defendant  sold  in 
the  usual  and  ordinary  course  of  business,  without  any  warranty  or  repre- 
sentation of  any  sort,  and  without  any  knowledge  that  he  had  not  the 
full  right  openly  to  sell  that  which  he  had  as  openly  bought.  To  hold 
that  any  implication  of  warranty  of  title  arises  under  such  circumstances 
will  be  to  establish  a  doctrine,  not  only  new  to  the  law  of  England, 
but  fraught  with  inconveniences  the  extent  of  which  cannot  well  be 
foreseen.* 

Erle,  C.  J.  I  am  of  opinion  that  this  rule  should  be  discharged.  The 
plaintiff"  brings  his  action  to  recover  back  money  which  he  paid  for  goods 
bought  by  him  in  the  shop  of  the  defendant,  which  were  afterwards  lawfully 
claimed  from  him  by  a  third  person,  the  true  owner,  from  whom  the}'  had 
been  stolen.  The  plaintiff  now  claims  to  recover  back  the  money  as  having 
been  paid  by  him  upon  a  consideration  which  has  failed.  The  jury  at  the 
trial  found  a  verdict  fur  the  plaintiff,  under  the  direction  of  the  learned 
judge  who  presided  ;  and  a  rule  has  been  obtained  on  behalf  of  the  defend- 
ant to  set  aside  that  verdict  and  to  enter  a  nonsuit,  on  the  ground  that  it 
is  part  of  the  common  law  of  England  that  the  vendor  of  goods  by  the 
mere  contract  of  sale  does  not  wan-ant  his  title  to  the  goods  he  sells,  that 
the  buyer  takes  them  at  his  peril,  and  that  the  rule  caveat  emptor  applies. 
The  case  has  been  remai-kably  well  argued  on  both  sides;  and  the  court  are 
much  indebted  to  the  learned  counsel  for  the  able  assistance  they  have 
rendered  to  them.  The  result  I  have  arrived  at,  is,  that  the  plaintiff  is 
entitled  to  retain  his  verdict.  I  consider  it  to  be  clear  upon  the  ancient 
authorities,  that,  if  the  vendor  of  a  chattel  by  word  or  conduct  gives  the 
purchaser  to  understand  that  he  is  the  owner,  that  tacit  representation 
forms  part  of  the  contract,  and  that,  if  he  is  not  the  owner,  his  contract  is 

1  2  M.  &  G.  279  (E.  C.  L.  R.  vol.  40);  2  Scott  N.  R.  496.  2  4th  Ed.  768. 

1     «  3  Ex.  514.  4  See  Lee  i-.  Bayes,  18  C.  B.  599. 


SECT.  l]  EICHHOLZ    V.   BANNISTER.  377 

broken.  So  is  the  law  laid  down  in  the  ver}-  elaborate  judgment  of  Parke,  B., 
in  Morley  v.  Attenborougb,^  where  that  learned  judge  puts  the  case  upon 
which  I  ground  my  judgment.  A  difterouce  is  t:ikun  in  some  of  the  cases 
between  a  warranty  and  a  condition  :  -  but  that  is  foreign  to  the  present 
inquirj'.  In  Morley  v.  Attcnborough,^  Paukk,  B.,  says:  "We  do  not  sup- 
pose that  there  would  be  any  doubt,  if  the  articles  are  bought  in  a  shop 
professedly  carried  on  for  the  sale  of  goods,  that  the  shopkeeper  must  be 
considered  as  warranting  that  those  who  purchase  will  have  a  good  title 
to  keep  the  goods  purchased.  In  such  a  case  the  vendor  sells  '  as  his  own,' 
and  that  is  what  is  equivalent  to  a  warranty  of  title."  No  douht,  if  a 
shopkeeper,  in  words  or  by  his  conduct,  affirms  at  the  time  of  the  sale  tliat 
he  is  the  owner  of  the  goods,  such  affirmation  becomes  part  of  the  con> 
tract,  and,  if  it  turns  out  that  he  is  not  the  owner,  so  that  the  goods 
are  lost  to  the  buyer,  the  price  which  he  has  received  may  be  recovered 
back.  I  ventured  to  throw  out  some  remarks  in  the  course  of  the  argument 
upon  the  doctrine  relied  on  V)y  Mr.  Ilulker,  which  he  answered  bj-  assertion 
after  assertion,  coming  no  doubt  from  judges  of  great  authority  in  the  law, 
to  the  efiect  that  upon  a  sale  of  goods  there  is  no  implied  warranty  of  title. 
The  passage  cited  from  Noy  certainly  puts  the  proposition  in  a  manner  that 
must  shock  the  understanding  of  any  ordinary  person.  But  1  take  the 
principle  intended  to  be  illustrated  to  be  this,  —  I  am  in  possession  of  a 
horse  or  other  chattel ;  I  neither  affirm  nor  deny  tliat  I  am  the  owner  ;  if 
you  choose  to  take  it  as  it  is,  without  more,  caveat  emptor ;  you  have  no 
remedy,  though  it  should  turn  out  that  1  liave  no  title.  Where  that  is  the 
whole  of  the  transaction,  it  may  be  that  there  is  no  warranty  of  title. 
Such  seems  to  have  been  the  princi})le  on  wliich  Morley  v.  Attcuborough 
was  decided.  The  pawnbroker,  when  he  sells  an  unredeemed  pledge,  vir- 
tually says,  —  I  have  under  the  provisions  of  the  statute*  a  rij^lit  to  sell. 
If  you  choose  to  buy  the  article,  it  is  at  your  own  peril.  So,  in  the  case 
of  the  sale  by  the  sheriff  of  goods  seized  under  a  fi.  fa.,  —  Chapman  v. 
Speller.®  The  fact  of  the  sale  taking  place  under  such  circumstances  is 
notice  to  buyers  that  the  sheriflT  has  no  knowledge  of  the  title  to  the  goods ; 
and  the  btiyers  consequently  buy  at  their  own  peril.  Many  contracts 
of  sale  tacitly  express  the  same  sort  of  disclaimer  of  warrant}-.  In  tliis 
sense  it  is,  that  I  understand  the  decision  of  this  court  in  Hall  v.  Conder.' 
There,  the  plaintiff  merely  professed  to  soil  the  patent-right  such  as  he  had 
it,  and  the  court  held  that  the  contract  might  still  be  enforced,  though  tho 
patent  was  ultimately  defeated  on  llio  ground  of  want  of  novelty.  The 
thing  which  was  the  subject  of  the  contract  there,  was  not  matter,  it  was 
rather  in  the  nature  of  mind.  These  are  some  of  the  cases  where  tho 
conduct  of  the  seller  expresses  at  the  time  of  the  contract  that  he  merely 

1  3  Ex.  500,  513.  2  Sof'  batincnnnn  v.  Wliitc.  10  C.  H.  N.  a  814. 

'  3  Ex.  513.  ♦  30  &  10  G,  3,  c.  99,  §  17. 

5  14  Q.  IJ.  021.  «  2  C.  B.  .\.  H.  22. 


378  •  EICHHOLZ   V.    BANNISTER.  [CHAP.  II. 

contracts  to  sell  such  a  title  as  he  himself  has  in  the  thing.  But,  in  almost 
all  the  transactions  of  sale  in  common  life,  the  seller,  by  the  very  act  uf 
selling,  holds  out  to  the  buyer  that  he  is  the  owner  of  the  article  he  offers 
for  sale.  The  sale  of  a  chattel  is  the  strongest  act  of  dominion  that  is 
incidental  to  ownership.  A  purchaser  under  ordinary  circumstances  would 
naturally  be  led  to  the  conclusion,  that,  by  offering  an  article  for  sale,  the 
seller  affirms  that  he  has  title  to  sell,  and  that  the  buyer  may  enjoy  that 
for  which  he  parts  with  his  money.  Such  a  case  falls  within  the  doctrine 
stated  by  Blackstone,  and  is  so  recognized  by  Littledale,  J.,  in  Early  v. 
Garrett,!  and  by  Parke,  B.,  in  Morley  v.  Attenborough.^  I  think  justice 
and  sound  sense  require  us  to  limit  the  doctrine  so  often  repeated,  that 
there  is  no  implied  warranty  of  title  on  the  sale  of  a  chattel.  I  cannot  but 
take  notice,  that,  after  all  the  research  of  two  very  learned  counsel,  the 
only  semblance  of  authority  for  this  doctrine  from  the  time  of  Noy  and 
Lord  Coke  consists  of  mere  dicta.  These  dicta,  it  is  true,  appear  to  have 
been  adopted  by  several  learned  judges,  amongst  others  by  my  excellent 
Brother  Williams,  whose  words  are  almost  obiigatory  on  me;  but  I  cannot 
find  a  single  instance  in  which  it  has  been  more  than  a  repetition  of  barren 
sounds,  never  resulting  in  the  fruit  of  a  judgment.  This  very  much  tends 
to  show  the  wisdom  of  Lord  Campbell's  remark  in  Sims  v.  MaiTyat,^  that 
the  rule  is  beset  with  so  many  exceptions  that  they  wellnigh  eat  it  up.  It 
is  to  be  hoped  that  the  notion  which  has  so  long  prevailed  will  now  pass 
away,  and  that  no  further  impediment  will  be  placed  in  the  way  of  a  buyer 
recovering  back  money  which  he  has  parted  with  upon  a  consideration  which 
has  failed. 

Byles,  J.  I  also  am  of  opinion  that  this  rule  should  be  discharged.  It 
has  been  said  over  and  over  again  that  there  is  no  implied  warranty  of  title 
on  the  mere  sale  of  a  chattel.  But  it  is  certainly,  as  my  Lord  has  observed, 
barren  ground ;  not  a  single  judgment  has  been  given  upon  it.  In  every 
case,  there  has  been,  subject  to  one  single  exception,  either  declaration  or 
conduct.  Chancellor  Kent  *  says  :  "  In  every  sale  of  a  chattel,  if  the  pos- 
session be  at  the  time  in  another,  and  there  be  no  covenant  or  warranty  of 
title,  the  rule  of  caveat  emptor  applies,  and  the  party  buys  at  his  peril ; " 
for  which  he  cites  the  dicta  of  Lord  Holt  in  Medina  v.  Stoughton,^  and  of 
BuLLER,  J.,  in  Pasley  v.  Freeman.^  "But,"  he  goes  on,  "if  the  seller  has 
possession  of  the  article,  and  he  sells  it  as  his  own,  and  not  as  agent  for 
another,  and  for  a  fair  price,  he  is  understood  to  warrant  the  title."  Thus 
the  law  stands  that,  if  there  be  declaration  or  conduct  or  warranty  whereby 
the  buyer  is  induced  to  believe  that  the  seller  has  title  to  the  goods  he  pro- 
fesses to  sell,  an  action  lies  for  a  breach.  There  can  seldom  be  a  sale  of 
goods  where  one  of  these  circumstances  is  not   present.     I   think   Lord 

1  9  B.  &  C.  928  ;  4  M.  &  R.  687.  ^  3  Ex.  513. 

8  17  Q.  B.  291.  *  2  Com.  478. 

5  1  Salk.  210;  1  Ld.  Eaym.  523.  ^  3  T.  R.  57,  58. 


SECT.  I.]  CLARE   V.    LAMB.  379 

Campbell  was  right  when  he  observed  that  the  exceptions  had  welhugh 
eaten  up  the  rule. 

Keating,  J.  I  am  of  the  same  opinion.  AVhether  it  be  an  exception  to 
the  rule  or  a  part  of  the  general  rule,  I  think  we  do  not  controvert  any 
decided  case  or  dictum  when  we  assert,  that,  under  circumstances  like  those 
of  the  present  case,  the  seller  of  goods  warrants  that  he  has  title.  These 
goods  were  bought  in  the  defendant's  shop  in  the  ordinary  course  of  business. 
He  gives  an  invoice  with  them,  which  represents  that  he  is  selling  them  as 
vendor  in  the  ordinary  course.  I  think  the  case  fulls  within  that  put  by 
Parke,  B.,  in  Morley  v.  Attenborough,^  of  a  sale  in  a  shop,  which  he  treats 
as  a  circumstance  which  beyond  all  doubt  gives  rise  to  a  warranty  of  owner- 
ship. I  was  somewhat  pressed  by  Mr.  I/olker's  question  whether  there  is 
more  affirmance  of  title  in  the  case  of  a  sale  in  a  shop  than  in  a  sale  else- 
where. It  may  be  that  the  distinction  is  ver}'  fine  in  certain  cases.  If  a 
man  professes  to  sell  without  any  qualification  out  of  a  shop,  it  is  not  easy 
to  see  why  that  should  not  have  the  same  operation  as  a  sale  in  the  shop. 
It  is  not  necessary,  however,  to  decide  that  question  now.  Here,  the  sale 
took  place  in  a  public  shop,  in  the  ordinary  way  of  business,  and  every 
circumstance  concurs  to  bring  the  case  within  the  distinction  put  by 
Parke,  B.,  in  Morley  v.  Attenborough. 

Hule  discharged. 


CLARE  V.  LAMB  and  Another. 

In  the  Court  of  Common  Pleas,  January  27,  1875. 

[Reported  in  Law  Reports,  10  Common  Pleas,   334.] 

Action  for  money  had  and  received.     Plea,  never  indebted. 

The  cause  was  tried  before  Keating,  J.,  at  the  sittings  at  Westminster 
after  Piaster  term,  1874.  The  facts  were  as  follows  :  —  A  Mrs.  Steiner,  who 
possessed  seven  leasehold  houses  in  the  Mile  End  Road,  mortgaged  theiu 
in  18G3  to  one  Dodd,  for  300/.,  and  afterwards  further  charged  them  with 
100/.  to  a  Mr.  Watson.  In  1SG4,  Mrs.  Stcinor  married  Dr.  Lamb,  who 
died  in  18G9,  having  by  his  will  appointed  the  defendants  his  executors. 
Shortly  after  the  death  of  Dr.  Lamb,  Dodd,  the  first  mortgagee,  with  the 
concurrence  of  the  executors,  put  the  premises  up  for  sale  by  public  auc- 
tion, and  Clare,  the  plaintiff",  became  the  purcliaser  for  78.')/.  The  purchase- 
money  was  with  the  sanction  of  the  executors  api)lied  in  part  in  paying  ofT 
the  two  mortgages  and  paying  the  expenses  of  the  sale  and  conveyance ; 
and  the  balance,  211/.  8.s.  2il,  was  paid  by  (Mare  to  the  executors.  The 
conveyance  was  executed  by  all  tlie  parties,  and  Clare  received  possession 

1  3  Ex.  513. 


380  CLARE   V.   LAMB.  [CHAP.  IL 

of  the  premises  from  Dodd,  The  deed  contained  no  covenant  for  title  in 
the  executors. 

In  1872,  Mrs.  Lamb,  the  widow  of  Dr.  Lamb,  discovering  that  she  was 
entitled  to  the  property,  filed  a  bill  in  Chancery  against  Clare  to  recover 
possession.  Clare  gave  notice  of  this  claim  to  the  defendants.  Dr.  Lamb's 
executors.  On  the  21st  of  February,  1874,  a  decree  was  pronounced  in 
the  suit,  treating  Clare  as  the  assignee  of  the  mortgagees,  and  directing 
an  account,  and  that  the  surplus,  after  deducting  the  mortgage-money, 
interest,  and  expenses,  should  be  paid  over  by  Clare  to  Mrs.  Lamb.  Clare 
then  (in  October,  1873)  brought  this  action  against  the  defendants  to  re- 
cover back  the  money  which  he  had  been  called  upon  to  pay  to  Mrs.  Lamb, 
viz.,  the  value  of  the  equity  of  redemption. 

The  learned  judge  nonsuited  the  plaintiff,  on  the  ground  that  under  the 
cu'cumstances  money  had  and  received  would  not  lie  ;  but  he  reserved 
leave  to  the  plaintiff  to  move  to  enter  a  verdict  for  him  for  240^.,  the 
agreed  value  of  the  equity  of  redemption,  if  the  court  should  be  of  opinion 
that  the  action  was  maintainable. 

H.  Matthews,  Q.  C,  in  Trinity  term  last,  obtained  a  rule  7usi  accordingly, 
on  the  ground  that  the  money  was  paid  under  a  mistake,  and  that  there 
was  a  total  failure  of  consideration  for  the  payment.  He  cited  Hitchcock 
V.  Giddings,^  Bos  v.  Helsham,^  and  Cooper  v.  Phibbs.^ 

Garth,  Q.  C,  and  Charles,  showed  cause. 

Bosanquet  and  Bompas,  in  support  of  the  rule. 

Grove,  J.  We  are  all  agreed  :  but  my  Lord,  being  somewhat  indisposed, 
has  requested  me  to  deliver  my  judgment  first. 

I  am  of  opinion  that  the  nonsuit  was  right,  and  that  the  rule  should  be 
discharged.  The  question  arises  thus  :  Certain  property  was  sold  by 
auction,  and  by  the  conveyance,  to  which  the  defendants  were  parties,  a 
mortgage  was  transferred  to  the  purchaser,  and  the  equity  of  redemption, 
the  value  of  which  was  agreed  to  be  240/.,  was  also  conveyed  to  the  pur- 
chaser. It  turned  out  that,  so  far  as  the  equit}^  of  redemption  was  con- 
cerned, the  title  of  the  vendors  was  wholly  defective.  Their  testator.  Dr. 
Lamb,  having  died,  it  was  discovered  that  the  equity  of  redemption  was  in 
his  widow  ;  and  she  filed  a  bill  in  equity,  r.nd  a  decree  was  made  declaring 
her  to  be  entitled  to  it.  The  question  submitted  at  the  trial  was,  whether 
the  pin-chaser,  having  paid  240/.  for  property  to  which  the  vendors  had  no 
good  title,  could  recover  back  that  sum  as  money  had  and  received  upon  a 
failure  of  consideration.  In  answer  to  the  plaintiff's  claim,  it  is  contended 
that  the  maxim  caveat  emptor  applies;  and  that,  the  defendants,  as  exec- 
utors, having  acted  bona  fide  and  in  the  belief  that  they  had  a  good  title, 
the  plaintiff  must  take  what  he  has  got,  and  cannot  recover  back  the  money 
he  has  paid.  It  seems  to  me,  upon  principle,  irrespective  of  the  authori- 
ties, that  the  maxim  referred  to  applies  a  fortiori  to  this  case.  If  a  man 
1  4  Trice,  135.  2  l.  R.  2  Ex.  72.  3  L.  R.  2  H.  L.  149. 


SECT.  I.]  CLARE    r.   LAMB.  381 

goes  into  a  shop  to  buy  a  chattel,  the  seller,  especially  if  he  be  the  mauu- 
facturer,  must  necessarily  know  more  of  the  nature  and  quality  of  the  arti- 
cle than  the  buyer  can.  In  that  case,  the  rule  caveat  emptor  is  often  a 
hard  one,  and  yet  it  generally  applies.  In  the  case  of  the  purchase  of  an 
interest  in  land,  the  person  who  sells  places  at  the  disposal  of  the  buyer 
such  title-deeds  as  he  possesses  and  under  which  he  claims.  The  purchaser 
has  full  opportunity  for  investigating  the  title  of  the  vendor,  and  when  he 
takes  a  conveyance  he  is  assumed  to  have  done  so.  Considerable  incon- 
venience might  result  if  this  were  not  the  rule.  Conveyancers  may  agree 
upon  the  title,  and,  long  after  the  conveyance  has  been  executed,  the  whole 
transaction  completed,  and  the  proceeds  disbursed,  the  seller  might  be 
called  upon  to  return  the  purchase-money,  by  reason  of  some  defect  of 
which  he  had  no  notice  at  the  time. 

But  there  is  an  ordinary  and  well-known  covenant  which  the  purchaser 
may  insist  upon  if  he  wishes  to  get  more  security  than  he  gets  by  an  inves- 
tigation of  the  title ;  he  may  require  a  covenant  for  title ;  this  additional 
security  would  probably  increase  the  price.  When  the  conveyance  has 
been  executed,  all  that  the  purchaser  has  to  look  to  is  the  liability  of  the 
vendor  under  the  deed.  If  it  contains  no  covenant  for  title,  the  purchaser 
takes  what  the  vendor  gives  him,  or,  rather,  what  he  is  able  upon  his  title 
to  give  him,  and  the  vendor  will  only  be  responsible  for  his  own  acts  and 
incumbrances.     Such  I  believe  to  be  the  general  doctrine. 

Now  the  principal  authorities  upon  the  question  before  us  are  Bree  v. 
Holbech,^  Johnson  v.  Johnson,'^  Cripps  v.  Keade,'  and  Hitchcock  v.  Gid- 
dings.^  In  addition  to  these,  we  have  the  high  authority  of  one  of  the  most 
eminent  judges  and  writers  upon  the  law  of  real  propert}',  viz..  Lord  St. 
Leonards.  In  Bree  v.  Holbech,^  the  defendant,  a  personal  representative, 
having  found  among  the  papers  of  the  deceased  a  mortgage-deed  for  1200/., 
assigned  it  to  the  plaintiff  for  a  valuable  consideration,  the  deed  of  assign- 
ment reciting  that  it  was  a  mortgage-deed  made  or  mentioned  to  be  made 
between  the  mortgagor  and  mortgagee  for  that  sum  ;  and,  after  the  lapse  of 
six  3'ears,  it  was  discovered  that  the  supposed  mortgage-deed  was  a  forgery, 
and  the  purchaser  thereupon  brought  money  had  and  received  to  recover 
back  the  sum  he  paid  for  it.  But  Lord  Mansfield  said  :  "The  basis  of  the 
whole  argument  is  fraud.  But  here  everything  alleged  in  the  replication 
may  be  true,  without  any  fraud  on  the  part  of  the  defeuflant.  He  is  an 
administrator  with  the  will  annexed,  who  finds  a  mortgage-deed  among  the 
papers  of  his  testator,  without  any  arrears  of  interest,  and  parts  with  it 
hortn  fide  as  a  marketable  commoditj'.  If  he  had  discovered  the  forgery, 
and  had  then  got  rid  of  the  deeil  as  a  true  security,  the  case  would  have 
been  very  different.  He  did  not  covenant  for  the  goodness  of  the  title,  but 
only  that  neither  he  nor  the  testator  had  inctunberod  the  estate.  It  was 
incumbent  on  the  plaintiff  to  look  to  the  goodness  of  it."  That  is  a  dis- 
1  2  Dougl.  054,  a.         2  3  b.  &  1'.  1G2.        ^  0  T.  U.  COG.        *   1  I'ri.c,  i:35. 


382  CLARE   V.   LAMB.  [CHAP.  II. 

tinct  authority  to  show  that  the  purchaser  must  look  to  his  covenaut,  aud 
that  the  maxim  caveat  emptor  appHes.  lu  Johnson  v.  Johnson  ^  the  pur- 
chaser was  evicted  for  a  defect  of  title  after  payment  of  the  purchase-money, 
but  before  the  conveyance  was  complete,  and  he  was  held  to  be  entitled  to 
recover  back  his  money.  Lord  Alvanley  thus  expresses  himself:^  "We 
by  no  means  wish  to  be  understood  to  intimate  that,  where  under  a  con- 
tract of  sale  a  vendor  does  legally  convey  all  the  title  which  is  in  him,  aud 
that  title  turns  out  to  be  defective,  the  purchaser  can  sue  the  vendor  in  an 
action  for  money  had  and  received.  Every  purchaser  may  protect  his  pur- 
chase by  proper  covenants  :  where  the  vendor's  title  is  actually  conveyed 
to  the  purchaser,  the  rule  caveat  emjjtor  applies."  Nothing  can  be  more 
specific  than  that.  His  Lordship  goes  on  :  "  In  the  present  case,  the  plaintiff 
never  has  had  any  title  conveyed  to  him,  and  therefore  we  are  of  opinion, 
notwithstanding  the  party  sued  is  a  legatee,  that  the  plaintiff  has  paid  his 
money  under  a  mistake  :  consequently,  the  rule  adopted  in  courts  of  law 
in  such  cases  applies  to  him,  and  entitles  him  to  recover  that  money  from 
the  party  to  whom  it  has  been  paid,  in  an  action  for  money  had  and  re- 
ceived." Lord  St.  Leonards,  at  p.  441  of  the  13th  edition  of  his  book  on 
Vendors  and  Purchasers,  sums  up  the  result  of  the  authorities  thus  :  "  But, 
if  the  conveyance  has  been  actually  executed  by  all  the  necessary  parties, 
and  the  purchaser  is  evicted  by  a  title  to  which  the  covenants  do  not 
extend,  he  cannot  recover  the  purchase-money  either  at  law  or  in  equity." 
For  this  he  cites  several  cases  in  equity  besides  the  cases  I  have  already 
referred  to.  Not  only  have  we  the  high  authority  of  Lord  St.  Leonards 
for  the  doctrine  I  am  adverting  to,  but  the  rule  is  substantially  stated  in 
the  same  terms  in  Dart's  Vendors  and  Purchasers,  4th  Ed.  p.  711.  There 
is  only  one  case  which  prima  facie  looks  the  other  way,  viz.,  Hitchcock  v. 
Giddings.^  There,  a  purchaser  bought  the  supposed  interest  of  the  vendor 
in  a  remainder  in  fee  expectant  on  an  estate-tail,  and  it  turned  out  that  at 
the  time  of  the  contract  the  tenant  in  tail  had  suffered  a  recovery,  of  which 
both  parties  were  ignorant  until  after  the  conveyance  was  executed  and  a 
bond  given  for  securing  the  purchase-money.  The  Court  of  Exchequer,  in 
the  exercise  of  its  equitable  jurisdiction,  relieved  the  purchaser  against  the 
bond,  on  the  ground  of  fraud.  Lord  Chief  Bai'on  Richards,  in  giving  judg- 
ment, said  :  "  This  is  certainly  a  charge  of  fraud  ;  for,  it  is  that  the  defend- 
ant, having  no  title  to  any  interest  in  these  estates  at  the  time  of  the 
contract,  bargained  as  if  he  had,  and  that  thereby  he  prevailed  on  the 
plaintiff  to  give  him  this  bond.  Now,  if  a  person  sell  an  estate,  having 
no  interest  in  it  at  the  time,  and  takes  a  bond  for  securing  the  payment  of 
the  purchase-money,  this  is  certainly  a  fraud,  although  both  parties  should 
be  ignorant  of  it  at  the  time ;  and  that  I  believe  to  have  been  the  case 
here.  I  must  not  be  told  that  a  court  of  equity  cannot  interfere  where 
there  is  no  fraud  shown.     If  contracting  parties  have  treated  while  under 

1  3  B.  &  P.  162.  2  3  B.  &  P.  p.  170.  3  4  Pn^e,  135. 


5ECT.  I.]  WOOD   V.    SHELDON.  383 

a  mistake,  that  will  be  sufficient  ground  for  the  interference  cf  a  court  of 
equity  :  but  iu  this  case  there  is  much  more.  Suppose  I  sell  an  estate 
iuuocently,  which  at  the  time  is  actually  swept  away  by  a  flood,  without 
my  knowledge  of  the  fact ;  am  I  to  be  allowed  to  receive  5000/.  and  inter- 
est, because  the  conveyance  is  executed  and  a  bond  given  for  that  sum  as 
the  purchase-money,  when  in  point  of  fact  1  had  not  an  inch  of  the  land  so 
sold  to  sell  1  That  was  precisely  the  case  with  the  present  defendant,  and 
it  would  be  hard  indeed  if  a  court  of  equity  could  not  interfere  to  relieve 
the  purchaser."  The  distinction  between  that  case  and  the  present  is  obvi- 
ous, —  there,  the  vendor  was  seeking  to  enforce  performance  of  the  contract 
by  compelling  the  purchaser  to  pay  for  a  thing  he  had  not  got ;  here,  the 
plaintiff  is  calling  upon  the  vendors  to  refund  money  which  they  honestly 
believed  themselves  to  be  entitled  to  when  they  received  it.  "  Potio7-  est 
conditio  possidentis"  It  does  not  appear  to  me  that  that  case  interferes 
with  the  doctrine  laid  down  by  the  high  authorities  I  have  referred  to, 
which,  regard  being  had  to  the  usual  course  of  conveyancing,  seems  to  me 
to  be  just. 

Dexman,  J.  I  am  entirely  of  the  same  opinion  ;  and,  after  the  full 
judgment  pronounced  by  my  Brother  Grove,  I  think  it  unnecessary  to  say 
more. 

Lord  Coleridge,  C.  J.  I  am  of  the  same  opinion.  The  rule  is  distinctly 
stated  by  Lord  St.  Leonards,  and  his  conclusions  are  fully  warranted  by 
the  cases  before  Lords  Mansfield  and  Alvanley. 

Keating,  J.,  concurred.  Sule  discharged. 


RICHARD    WOOD    et    al,    Plaintiffs    in    Error   v.   ISRAEL 
SHELDON,  Defendant  in  Error. 

In  the  Court  of  Errors  and  Appeals  of  New  Jersey,  June  term,  1880. 

[  Reported  in  42  New  Jersey  Law  Reports,  421.  ] 

Writ  of  error  to  the  Supreme  Court,  bringing  up  a  judgment  entered  on 
a  special  verdict  taken  at  the  E.ssox  Circuit, 

P.  L.  Voorhees  for  the  plaintiff  in  error. 

F.  A.  Johnson  and  IJ.  C.  Pitney  for  tiie  defendant  in  error. 

Tiie  opinion  of  the  court  was  delivered  by 

Leasley,  C.  J.  The  prol)lem  which  the  court  is  called  on  to  solve, 
in  this  case,  arises  out  of  the  following  transaction  :  The  defendants, 
in  the  court  below,  and  who  are  now  the  plaintiffs  in  this  writ  of 
error,  were  stockholders  in  the  (Jitizens'  (Jas  Light  Company  of  Newark, 
■when  the  board  of  directorH  of  thnt  corporation  passed  ii  resolution  declar- 
ing a  scrip  dividend  of  ten  per  cent  on  the  amount  of  the  capital  stock, 


384  WOOD   V.    SHELDON.  [CHAP.  11. 

with  interest,  payable  at  the  option  of  the  company,  and  in  pursuance 
thereof,  issued  to  the  defendants  the  certificate  set  out  in  the  special  ver- 
dict, and  which,  through  the  mediation  of  a  broker,  was  purchased  of 
them  by  the  plaintiff.  This  instrument  certifies  that  the  defendants  are 
entitled  to  the  sum  of  ^1G40,  "payable  ratably  with  other  certificates 
issued  pursuant  to  said  resolution,"  at  the  pleasure  of  the  company,  with 
interest  at  the  rate  of  seven  per  cent  per  annum.  It  is  further  found, 
in  a  certain  suit  in  the  Court  of  Cliaucery,  that  this  and  the  other 
certificates  of  indebtedness  of  the  same  class,  were  illegally  and  fraudu- 
lently issued,  and  it  was  decreed  that  they  should  be  delivered  up  to  be 
cancelled.  This  having  been  done,  the  defendant  in  error  brought  this 
action  to  recover  the  money  paid  by  him  in  this  transaction. 

The  defence  set  up  to  this  claim  is,  that  there  was  no  warranty  annexed 
to  this  sale,  and  that  the  plaintiff  got  the  certificate  of  indebtedness,  which 
was  the  thing  he  bargained  for. 

But  this  position  rests,  plainly,  I  think,  on  a  false  basis.  The  plaintiff 
did  not  bargain  for  the  certificate,  but  for  the  money  of  which  the  certifi- 
cate purported  to  be  the  evidence  of  title.  It  serves  to  simplify  the  point 
to  keep  in  mind  the  circumstance  that  this  certificate  is  not  a  negotiable 
instrument,  so  that  the  rule  of  law  pertinent  to  this  matter  is  the  rule  that 
applies  in  the  sale  of  an  ordinary,  uncommercial  chose  in  action.  The 
legal  regulations  which  appertain  to  a  sale  of  such  an  interest  do  not 
differ  from  those  that  attend  the  sale  of  a  chattel.  If  a  person  sells  a 
bond,  in  the  absence  of  a  special  bargain,  the  legal  incidents  of  the  trans- 
action are  the  same  as  if  the  article  sold  had  been  a  horse.  In  both  in- 
stances, under  ordinary  circumstances,  there  is  an  implied  warranty  of 
title  in  the  thing  sold,  by  the  vendor.  Mr.  Benjamin,  in  his  work  on  Sales, 
states  what  he  conceives  to  be  the  English  rule  at  the  present  day  in  these 
words,  page  557  :  "A  sale  of  personal  chattels  implies  an  aflSrmation  l)y 
the  vendor,  that  the  chattel  is  his,  and  therefore  he  warrants  the  title, 
unless  it  be  shown,  by  the  facts  and  circumstances  of  the  sale,  that  the 
vendor  did  not  intend  to  assert  ownership,  but  only  to  transfer  such  inter- 
est as  he  might  have  in  the  chattel  sold."  This  is  the  well-known  Ameri- 
can doctrine.  Applying  this  principle  in  the  present  instance,  it  is  clear 
that,  under  the  conditions  of  the  sale,  the  defendants,  by  the  mere  act  of 
selling,  impliedly  held  out  that  the  title  to  this  money  was  in  them, 
and  the  certificate  itself  contained  that  averment.  It  certified  that  the 
sum  mentioned  was  due  from  the  company  to  the  defendants,  and  b}^  the 
transfer  of  the  certificate  the  defendants  adopted  that  statement.  In 
point  of  fact,  there  was  no  debt  or  money  due,  or  corporate  liability  of  any 
kind.  There  was  nothing  to  sell,  and,  consequently,  the  defendants  had  no 
title  to  that  which  they  undertook  to  sell.  The  ill-founded  belief  of  the 
defendants,  that  they  were  possessed  of  a  good  title,  is  an  ingredient  of  the 
case  of  no  value,  for  the  ground  of  recovery  is  not  deceit,  but  warranty. 


SECT.  I.]  WOOD   V.   SHELDON.  385 

Looking  thus  at  the  flicts  before  the  court  in  the  light  of  legal  princi- 
ples, I  have  felt  no  difficulty  in  reaching  this  result,  nor  do  the  authorities 
appear  to  be  in  any  degree  adverse  to  such  a  view.  The  only  case  to 
which  my  attention  has  been  called,  that  seems  to  wear  a  hostile  semblance, 
is  that  of  Lettauer  v.  Goldman,^  but,  on  examination,  it  will  be  perceived 
that  that  decision  is  rested  on  a  circumstance  that  is  wanting  in  the 
present  case,  for  the  court  expressly  states  that  the  rule  adopted  and  en- 
forced is  applicable  only  to  a  contract  by  force  of  which  negotiable  paper  is 
transferred.  The  case  referred  to  decided  that  the  holder  of  a  promissory 
note,  which  was  tainted  with  usury,  and  was  therefore  void,  could  not  be 
held  liable,  he  having  transferred  it  for  a  valuable  consideration,  and  with- 
out knowledge,  on  his  part,  of  such  defect.  This  judgment  is  admittedly 
supported  by  no  precedent,  and  if  we  reason  by  analogy,  there  seems  to  be 
strong  ground  to  call  it  in  question  ;  but  as  the  authority  is  irrelevant  to 
the  present  case,  it  is  unnecessary  to  pause  upon  it. 

The  other  decisions,  as  it  appears  to  me,  lay  down  principles  that  favor 
an  affirmance  of  the  present  judgment.  Among  these.  Young  v.  Cole,*  is  a 
case  of  mark.  In  that  case,  the  plaintiff  was  a  stockbroker,  and  had  sold 
for  the  defendant  four  Guatemala  bonds,  and  had  paid  him  the  price.  The 
bonds,  after  they  had  been  in  the  hands  of  the  purchaser  two  days,  were 
discovered  to  be  worthless,  for  want  of  being  properly  stamped  ;  thereupon, 
the  broker  took  them  back,  and,  having  reimbursed  the  purchaser,  brought 
suit  against  the  person  for  whom  he  had  made  such  sale.  It  was  held  he 
was  entitled  to  recover.  The  court,  in  assigning  its  reasons  for  this  course, 
said  :  "  It  seems,  therefore,  that  the  consideration  on  which  the  plaintiff 
paid  his  money  has  failed  as  completely  as  if  the  defendant  had  contracted 
to  sell  foreign  gold  coin,  and  had  handed  over  counters  instead."  In  the 
case  now  pending,  what  was  purchased  was  a  debt  due  from  this  gas  com- 
pany, and  what  was  received  was  a  paper  which,  at  the  time,  had  no 
value,  and  which  never  had  possessed  any. 

Gompertz  v.  Bartlett,*  is  a  case  noticeable  in  this  connection.  An  un- 
stamped bill  of  exchange,  endorsed  in  blank,  was  sold  without  recourse  by 
the  holder,  who  was  not  a  party  to  the  bill.  The  instrument  proved  to 
have  been  drawn  in  England,  and  was  unavailable  for  want  of  a  stamp,  the 
vendor  and  purchaser,  at  the  time  of  the  sale,  being  both  alike  ignorant  of 
the  defect.  1'he  decision  was  that  the  money  so  paid  for  the  bill  could  bo 
recovered,  the  ground  being  that  the  article  sold,  as  a  foreign  bill,  did  not 
answer  the  description  by  which  it  was  sold.  In  the  present  case,  the 
thing  ostensil)ly  sold  had  never  had  a  legal  existence,  so  that  it  could  not 
correspond  with  its  descri[)tion  at  the  time  of  sale.  It  will  be  ol)servcd 
that  these  two  cases  are  so  much  the  stronger  on  the  point  in  question,  as 
they  relate  to  commercial  [iui)er,  which,  from  its  j)eculiar  nature,  has  a 
certain  mcrchantalile  quality  attached  to  it,  so  that  when  it  is  sold  without 
1  72  N.  Y.  506.  2  3  ijiu^,   n.  ('„g_  724,  s  2  i:i.  &  111.  S  I'J. 

25 


386  WOOD   V.   SHELDON.  [CHAP.  II. 

recoarse,  the  inference  is  not  altogether  unreasonable  that  it  was  the 
■understanding  that  the  purchaser  assumed  some  of  the  risks  touching 
its  validity.  But  such  an  implication  is  entirely  out  of  place  where  the 
transaction  is  an  assignment  of  an  ordinary  chose  in  action,  for  then  the 
thing  sold  constitutes  the  entire  consideration  of  the  purchase,  the  bill  of 
sale  or  certificate  of  transfer  having  no  separate  value  of  its  own. 

Nor  should  these  remarks  be  closed  without  a  reference  to  the  impor- 
tant case  of  Thrall  v.  I^ewell,  in  which  it  was  decided  that  an  assignment 
that  described  the  instrument  assigned  as  "  a  note,"  amounted  to  a  war- 
ranty that  such  note  was  a  valid  one  so  far  as  respected  the  capacity  of 
the  maker  to  enter  into  the  contract.  In  that  case,  the  note  was  void 
because  of  the  insanity  of  the  drawer  of  the  note,  and  it  was  held  that  the 
money  paid  for  such  note  could  be  recovered.  The  court  also  express  a 
very  decided  opinion  that  if  the  affair  had  been  devoid  of  any  written  con- 
tract, the  defendant  would  have  been  liable  to  repay  the  money  received  by 
him  for  such  void  instrument,  inasmuch  as  a  warranty  of  the  legal  exist- 
ence of  the  note  would  have  been  implied  by  law  from  the  sale  of  it. 

The  cases  cited  in  the  brief  of  the  counsel  of  the  plaintiff  in  error,  ap- 
pear to  me  wanting  in  pertinency.  They  are  decisions  elucidating  or  en- 
forcing the  rule  of  caveat  emptor,  which  it  is  insisted  applies  as  well  to  a 
sale  of  stocks  as  to  chattels.  But  that  rale,  in  all  cases,  is  applicable  only 
to  the  quality  of  the  thing  sold,  and  not  to  its  title.  So  it  has  no  rele- 
vancy where  a  nonentity  has  been  the  subject  of  a  sale.  The  precedents 
cited  which  maintain  the  principle  that  where  a  person  gets  what  he 
intended  to  purchase,  he  cannot  repudiate  the  bargain,  no  matter  how 
worthless  the  thing  so  obtained  may  be,  certainly  can  have  no  application 
to  this  case,  in  which  the  vendee  did  not  get  what  he  expected  to  get. 
Both  parties  to  the  present  contract  thought  that  he  was  obtaining  a 
valid  obligation  of  this  gas  company,  binding  them  to  pay  this  large  sum 
of  money.     Instead  of  this,  a  nullity  was  passed  to  him. 

The  Judgment  should  be  affirmed. 

For  affirmance  —  The  Chief  Justice,  Dixon,  Knapp,  Magie,  Parker, 
Eebd,  Scudder,  Van  Syckel,  Clement,  Dodd,  Green,  Lathrop,  Wales 
—  13. 

For  reversal  —  None. 

1  1»  Vt.  208. 


SECT.  I.]  WHITE   V.   NATIONAL   BANK.  387 

WHITE  V.   NATIONAL  BANK. 
In  the  Supreme  Court  of  the  United  States,  October  Term,  1880. 

[Reported  in  102  United  States  Reports,  658.] 

Error  to  the  Circuit  Court  of  the  United  States  for  the  District  of 
Colorado. 

The  facts  are  stated  iu  the  opinion  of  the  court. 

Mr.  A^.  V.  White  for  the  phiiutitf  iu  error. 

Mr.  Henry  M.  Teller,  contra. 

Mr.  Justice  Miller  delivered  the  opinion  of  the  court. 

This  is  an  action  by  White,  who  was  plaintiff  below,  for  the  sum  of 
$60,000,  against  the  Miner's  National  Bank  of  Georgetown,  Colorado.  The 
declaration  contains  twelve  special  counts,  upon  as  many  drafts,  drawn 
by  the  Stewart  Silver  Reducing  Company  on  Thomas  W.  Phelps,  payable 
in  the  City  of  New  York  to  the  order  of  the  defendant,  and  indorsed  by 
J.  L.  Brownell,  its  president,  to  S.  V,  White,  and  duly  protested  for  non- 
payment. 

To  these  counts  is  added  another,  in  this  language  :  "  And  for  that  also, 
heretofore,  to  wit,  on  the  first  day  of  April,  a.  d.  1876,  at  the  said  county 
of  Clear  Creek,  the  said  defendant  was  indebted  to  plaintiff  in  $60,000,  for 
so  much  money  by  the  plaintiff,  before  that  time,  paid  to  the  use  of  said 
defendant  at  its  request,  which  said  sum  of  money  was  to  be  paid  to  the 
plaintiff  on  request,"  with  an  allegation  of  request  and  refusal. 

To  this  declaration  the  defendant  pleaded  the  general  issue  and  several 
special  pleas,  which  it  is  unnecessary  to  notice. 

The  case  was  tried  Ijy  a  jury.  The  plaintiff  recovered  $15,000  debt  and 
$2625  damages  for  interest,  on  account  of  three  of  the  drafts.  His  claim 
on  the  other  drafts,  and  for  money  paid  at  defendant's  request,  was  rejected. 
He,  therefore,  l>rings  this  writ,  and  assigns  for  error  the  ridings  of  the  court 
in  the  progress  of  the  trial,  which  are  set  forth  in  a  bill  of  exceptions. 

J.  L.  Brownell,  a  partner  in  the  firm  of  J.  L.  Brownell  &,  Brother,  doing 
business  as  bankers  and  brokers  in  the  City  of  New  York,  was  also  president 
V  f  the  defendant,  anrl  interested  in  the  Stewart  Silver  Keducing  Company 
(..uring  the  time  of  the  transactions  involved  in  this  suit.  As  such  presi- 
dent, he  sold  or  transferred  tiie  several  drafts  on  whifh  this  suit  is  founded 
to  Wliite,  and  received  of  the  latter  for  the  use  of  the  bank  the  amount 
of  said  drafts  less  the  discount.  They  were  not  paid  at  maturity,  but 
due  demand,  protest,  and  notice  were  made.  Tlioso  on  which  plaintiff 
recovered  need  not  be  further  noticed.  The  others  were  rejected  by  the 
court  as  evidence  against  the  defendant,  on  account  of  the  form  of  the 
indorsement. 


388  WHITE   V.   NATIONAL   BANK.  [CHAP.  IL 

As  they  were,  in  this  respect,  alike,  the  form  of  one  will  be  given  here 
as  a  specimen  of  the  whole  :  — 

"$5,000.]  Office  of  the  Stewart  Silver  Reducing  Company, 

[l.  s.]  "Georgetown,  Col.,  Oct.  25,  1875. 

"Four  months  after  date  pay  to  the  order  of  the  Miners'  National  Bank, 
Georgetown,  Colorado,  payable  at  the  Tliird  National  iiank,  New  York  City, 
five  thousand  dollars. 

"Stewart  Silver  Reducing  Company, 

"By  J.  Oscar  Stewart,  President. 
«'  To  Thos.  W.  Phelps,  Esq., 

"  Georgetown,  Colorado." 
Across  the  face,  in  red:  "Accepted.  —  Thos.  W.  Phelps." 
Indorsed  : 

"  No.  .  Pay  S.  V.  White  or  oi-der  for  account  Miners'  National  Bank, 
Georgetown,  Colorado.     J.  L.  Brownell,  p't. 

"  S.  V.  White." 

Because  of  the  words  "  for  account  of  Miners'  National  Bank  of  George- 
town, Colorado,"  in  this  indorsement  by  Brownell,  as  president  of  the  bank, 
the  Circuit  Court  ruled  that  there  arose  out  of  tlie  transaction  no  obliga- 
tion on  the  part  of  the  bank  to  pay  the  draft  or  return  the  money,  although 
due  demand  of  the  acceptor  and  refusal  to  pay  was  proved,  with  notice  to 
the  bank.     This  is  the  principal  question  which  we  are  to  decide. 

The  plaintiff  relies  largely  on  two  propositions  to  establish  his  right  to 
recover  against  defendant  on  this  indorsement. 

The  first  of  these  is  that  these  words  are  merel}'  directory  and  capable 
of  explanation,  and  when  it  is  shown  by  parol  testimony,  as  in  this  case, 
that  the  plaintiff  bought  and  paid  full  value  for  the  draft,  with  the  under' 
standing  that  he  was  buying  it  as  commercial  paper,  with  the  usual  inci- 
dents of  such  a  transaction,  the  indorser  is  liable  in  the  usual  manner, 
notwithstanding  the  words  we  have  quoted. 

The  other  proposition  is  that  such  is  the  custom  of  bankers  who  deal  in 
such  paper  in  New  York,  where  these  drafts  are  payable,  and  that  the  cus- 
tom must  control  the  construction  of  the  contract. 

We  are  not  satisfied  that  either  of  these  propositions  is  sound. 

The  language  of  the  indorsement  is  without  ambiguity,  and  needs  no 
explanation,  eitlier  by  parol  proof  or  by  resort  to  usage.  The  plain  mean- 
ing of  it  is,  that  the  acceptor  of  the  draft  is  to  pay  it  to  the  indorsee  for 
the  use  of  the  indorser.  The  indorsee  is  to  receive  it  on  account  of  the  in- 
dorser. It  does  not  purport  to  transfer  the  title  of  the  paper  or  the  owner- 
ship of  the  money  when  received.  Both  these  remain,  by  the  reasonable  and 
almost  necessary  meaning  of  the  language,  in  the  indorser.  It  seems  to  us 
that  the  court  below  correctly  construed  the  effect  of  the  indorsement  to  be 
to  make  White  the  agent  of  the  bank  for  the  collection  of  the  money. 


SECT.  I.]  WHITE   V.   NATIONAL   BANK.  389 

If  this  be  a  souiul  view  of  the  leg;il  effect  of  the  written  iudorsemeut, 
neither  parol  proof  nor  custom  cau  be  received  to  contradict  it. 

But  we  are  aware  of  the  necessity  of  proceeding  with  great  cantiou  in  a 
case  of  tirst  impression  in  regard  to  questions  affecting  commercial  transac- 
tions, and  we  do  not,  therefore,  decide  this  one,  because  we  do  not  think  it 
absolutely  necessary  to  the  case.  For  assuming  this  to  be  correct,  we  think 
the  plaintiff  was  still  entitled  to  recover  more  than  he  did. 

The  coui't  below  seems  to  have  paid  but  little  attention  to  the  issue  ou 
the  count  for  money  paid  to  the  use  of  defendant. 

It  appears  distinctly  by  the  evidence,  and  is  uncontradicted,  that  the 
money  paid  by  plaintiff  on  account  of  these  drafts  was  placed  to  the  credit 
of  the  defendant  with  its  corresponding  bankers  iu  New  York,  and  paid  out 
on  checks  of  the  defendant,  so  that  there  is  no  question  that  the  latter 
received  the  money.  There  is  also  no  question  but  that  plaintiff  thought 
he  was  buying  these  drafts  and  that  they  became  his  property  by  their 
delivery  to  him.  It  is  also  evident  that  Brownell,  the  president  of  tho 
bank,  thought  he  was  selling  him  the  drafts,  and  there  is  evidence  that 
neither  White  nor  Brownell  noticed  the  restrictive  words  of  the  indorse- 
ment. But  if  the  court  below  was  correct  in  holding  that  the  indorse- 
ment —  the  evidence  in  writing  of  what  the  parties  did  —  only  made  "White 
the  agent  of  the  bank,  and  left  the  bank  the  owner  of  the  drafts,  then  both 
White  and  Brownell  were  mistaken,  and  the  money  was  paid  and  received 
under  a  mutual  mistake.  If  White  paid  his  money  as  purchase-money  of 
the  drafts,  he  paid  it  without  any  consideration,  for  he  did  not  purchase  the 
drafts.  He  only  burdened  himself  with  the  duty  of  collecting  the  money 
for  the  bank,  and  the  bank  received  and  used  his  money  without  giving 
him  any  consideration  for  it.  So,  also,  if  White  did  not  become  the  owner 
of  the  drafts,  and  if,  when  he  should  collect  the  money  on  them,  he  would 
hold  it,  in  the  language  of  the  indorsement,  "  for  the  account  of  the  bank," 
the  jury  might  have  been  left  at  liberty  to  presume  that  the  money  which 
he  paid  was  a  loan  or  advance  on  the  security  of  the  paper  delivered  to 
him  at  the  time.  Either  of  these  views  of  tlie  transaction  would  justify  a 
recovery  under  the  money  count,  in  which  the  delivery  of  the  money  and 
the  delivery  of  the  drafts,  with  the  qualified  indorsement,  would  be  evi- 
dence of  the  payment  and  receipt  of  the  money  and  the  circumstances 
which  attended  it. 

This  indorsement  is  treated  by  counsel  here  as  an  assignment  of  tho 
paper  without  recourse,  in  which  the  title  to  tho  paper  passed,  but  tlio 
right  to  recourse  to  the  assignor  was  cut  off.  But  this  is  evidently  an 
error.  If  the  court  below  was  correct,  neither  tho  title  to  the  paper  nor 
the  right  to  tho  money  under  it  passed.  Tlie  only  effect  was  to  justify  the 
acceptor  in  paying  to  tlie  indorsee  for  tho  account  of  tho  bank.  Tiie  legal 
effect  of  the  trat.saction,  as  evidenced  by  tho  writing,  was  merely  to  enabl« 
White  to  .collect  tho  monev  for  tho  bank.     Though  a  restricted  indorse 


390  BKEE   V.   HOLBECH.  [CHAP.  II. 

ment,  it  was  no  assignment  at  all.  It  is  not,  therefore,  a  contradiction  or 
a  varying  of  the  meaning  of  the  written  instrument  to  prove  that,  in  the 
delivery  of  this  paper  to  White,  he  and  the  bank  were  under  a  mistake  as 
to  the  effect  of  it,  or  that  he  paid  this  money  to  the  bank  without  any  con- 
sideration, or  that  he  advanced  money  to  the  bank  in  tlie  idea  tliat  he 
was  to  be  reimbursed  out  of  the  draft  when  collected. 

The  instructions  given  by  the  court,  and  the  refusal  of  the  prayer  of 
plaintiff,  fairly  raised  this  question.  All  the  drafts,  except  the  three  which 
had  no  such  indorsement,  were  excluded  from  the  jury.  The  jury  were 
told  that  nothing  else  was  before  them. 

The  thirteenth  instruction  asked  by  plaintiff  and  refused  by  the  court 
distinctly  affirmed  that  if  Brownell  obtained  from  plaintiff  sums  of  money 
on  account  of  the  drafts,  which  the  court  had  refused  as  evidence,  which 
money  was  placed  to  the  credit  of  defendant  in  a  New  York  bank,  and 
afterwards  drawn  by  defendant,  the  defendant  was  liable  for  such  money. 

The  judgment  will  be  reversed,  and  the  case  remanded  with  directions 

to  set  aside  the  vei'dict  and  grant  a  new  trial ;  and  it  is 

So  ordered. 


(f.)   Mistake  may  he  as  to  the  Existence  or  Identity  of  the  Suhject-Matter 

of  Sale. 

BREE  V.   HOLBECH. 

In  the  King's  Bench,  May  18,  1781. 

{Reported  in  2  Douglas,  654.] 

In  an  action  of  assumpsit  for  2000^.  had  and  received  to  the  plaintiff's 
use,  —  The  defendant  having  pleaded  the  general  issue,  and  the  statute  of 
limitations,  —  the  plaintiff  replied  :  That  the  writ  was  sued  out  on  the 
22d  of  August,  1780;  that,  on  the  18th  of  February,  1773,  the  defendant 
asserted  and  affirmed  that  there  was  an  indenture  of  mortgage,  dated  the 
24th  of  June,  1768,  made  or  mentioned  to  be  made,  between  F.  and  S.  of 
the  one  part,  and  W.  H.  (the  defendant's  uncle)  on  the  other,  for  a  term 
of  years,  granted  to  the  said  W.  H.  as  a  security  for  the  payment  of  1 200/. 
with  interest ;  that  the  defendant  then  further  asserted  and  affirmed,  that, 
after  making  the  said  indenture,  W.  H.  died ;  that  the  defendant  was  his 
administrator  with  the  will  annexed,  and  there  was  due  to  him,  as  admin- 
istrator, the  said  principal  sum  on  the  said  security,  that  the  plaintiff,  rely- 
ing on  these  assertions  and  affirmations,  advanced  1200/.  to  the  defendant, 
on  his  executing  an  indenture  of  assignment  on  the  said  18th  of  February, 
1773,  which  recited  the  mortgage,  and  purported,  for  the  consideration  of 
the  1200/.   so  advanced,  to  assign  all  the  premises  by  the  said  recited 


SECT.  I.]  BREE  V.   HOLBECH.  391 

indenture  of  mortgage  granted,  for  the  remainder  of  the  term,  subject  to 
the  original  power  of  redemption  ;  that,  in  this  indenture  of  assignment 
the  defendant  agreed  with  the  phxintift',  that  neither  the  said  W.  H.  nor 
the  defendant  had  done  any  act  to  incumber  the  mortgaged  estate  ;  that 
the  said  several  assertions  and  affirmations  of  the  defendant,  and  also  the 
recitals  in  the  said  indenture  of  assignment,  were  fiilse,  inasmuch  as  there 
never  was  any  such  indenture  of  mortgage,  nor  the  sum  of  1200/.  nor  any 
other  sum,  due  to  the  defendant,  as  administrator  of  W.  H.  on  such  secur- 
ity, in  the  manner  the  defendant  had  asserted  and  affirmed,  and  as  in  the 
indenture  of  assignment  was  recited,  or  in  any  other  manner ;  and  tliat 
neither  the  premises  nor  any  part  thereof  passed  by  the  assignment  to 
the  plaintiff,  nor  did  any  estate,  right,  or  title  therein,  or  to  the  said  sum 
of  1200/.  vest  in  him  ;  that,  by  fraud  and  imposition,  and  by  means  of 
the  said  false  assertions  and  affirmations,  and  false  recitals,  the  plaintiff 
was  induced  to  pay  the  said  sum  of  1200/.  on  the  execution  of  the  said 
indenture  of  assignment ;  that,  at  the  time  of  the  execution  thereof  and  of 
paying  the  money,  the  plaintiff  was  ignorant  of  the  falsehood  of  the  said 
assertions,  affirmations,  and  recitals,  and  of  the  fraud  so  practised  upon 
him,  and  did  not  discover  them  till  within  the  space  of  six  years  next  be- 
fore suing  out  the  writ.  To  this  replication,  the  defendant  demurred  gen- 
erally. The  case  was,  this  day,  argued  by  Hill,  Serjeant,  for  the  plaintitT; 
and  Chambre,  for  the  defendant. 

Chamhre,  in  support  of  the  demurrer,  contended,  that  there  was  noth- 
ing alleged  in  the  replication  which  could  take  the  case  out  of  the  statute. 
There  was  no  fraud  stated  to  have  been  practised  by  the  defendant ;  for  it 
was  not  averred  that  he  knew  of  the  falsehood  of  the  different  assertions 
and  recitals.  But,  if  there  had  been  fraud,  that  would  not  liave  been 
sufficient ;  it  was  the  plaintiff's  business  to  look  to  the  validity  of  his 
security  ;  and  there  is  nothing  relative  to  fraud  among  the  different  excep- 
tions and  savings  in  the  statute. 

Hill,  Serjeant,  insisted  :  1.  That,  in  point  of  law,  this  was  fraud  on  the 
part  of  the  defendant,  although  he  himself  might  not  know  of  the  false- 
hood ;  2.  That,  where  a  party  has  been  induced,  by  fraud,  to  pay  monc}', 
the  statute  of  limitations  does  not  run,  or  at  least  only  runs  from  the 
time  when  the  fraud  is  discovered.  —  1.  The  assertions  of  the  defendant, 
he  observed,  were  positive,  witliout  qualification,  and  therofure  ho  made 
himself  answerable  for  the  truth  of  them  ;  and,  if  any  loss  had  been  in- 
curred by  his  mistake,  it  ought  to  fall  upon  him,  not  upon  an  inuc>cent 
third  person.  On  this  first  head,  he  cited,  1  Show.  G8 ;  3  Mod.  2G1  ; 
Comb.  103;  Hcarne's  Pleader,  102,  224;  Cro.  Car.  141  ;  Sir  W.  Jones, 
19G  ;  2  Burr.  112  ;  12  Mod.  494  ;  2  Vcs.  198—2.  On  the  second  point,  ho 
relied  on  Booth  v.  Lord  AVarriiigton,  in  Dom.  Proc.  1714  (wiiirh  ho  cited 
from  the  jirinted  cases),  and  'I'ho  South  Sea  Company  v.  Wymondsell.  * 

1  3  I'.  Wins.  143  (a). 


392  SHOVE   V.   WEBB.  [CHAP.  II. 

Lord  Mansfield,  —  The  basis  of  the  whole  argument  is  fraud ;  and  the 
question  is,  whether  fraud  is  anywhere  asserted  in  this  replication.  There 
may  be  many  cases  where  the  assertion  of  a  false  fact,  though  unknown  to 
be  false  to  the  party  making  the  assertion,  will  be  fraudulent ;  as  in  the 
case  of  Sir  Crisp  Gascoyne,  who  insured  a  life,  and  affirmed  it  was  as  good 
a  life  as  any  in  England,  not  knowing  whether  it  was  or  was  not.  There 
may  be  cases  too,  which  fraud  will  take  out  of  the  statute  of  limitations. 
But,  here,  everything  alleged  in  the  replication  may  be  true,  without  any 
fraud  on  the  part  of  the  defendant.  He  is  an  administrator  with  the  will 
annexed,  who  finds  a  mortgage-deed  among  the  papers  of  his  testator,  with- 
out any  arrears  of  interest,  and  parts  with  it,  bojia  fide,  as  a  marketable 
commodity.  If  he  had  discovered  the  forgery,  and  had  then  got  rid  of  the' 
deed  as  a  true  security,  the  case  would  have  been  very  different.  He  did 
not  covenant  for  the  goodness  of  the  title,  but  only  that  neither  he  nor  the 
testator  had  incumbered  the  estate.  It  was  incumbent  on  the  plaintiff  to 
look  to  the  goodness  of  it. 

Hill  had  leave  to  amend,  in  case,  upon  inquiry,  the  facts  would  support 
a  charge  of  fraud. 


SHOVE  V.  WEBB. 
In  the  King's  Bench,  May  14,  1787. 

[Reported  in  1  Term  Reports,  732.] 

Assumpsit  for  goods  sold  and  delivered ;  money  paid,  laid  out,  and  ex- 
pended ;  money  had  and  received  ;  and  for  goods  sold  and  delivered  to  one 
A.  Dobinson  upon  the  defendant's  credit  and  at  his  request.  Plea  the 
general  issue. 

On  the  trial  at  the  sittings  after  last  Hilary  term  at  Guildhall  before 
BuLLER,  J.,  a  verdict  was  taken  for  the  plaintiff,  damages  IGO^.  17s.  3(7., 
subject  to  the  opinion  of  the  court  as  to  the  sum  of  118/.  17s.  3(7.  part 
thereof. 

The  defendant  on  the  2Gth  of  July,  1783,  executed  a  bond  and  warrant 
of  attorney  to  confess  judgment  thereon  in  the  court  of  Common  Pleas,  for 
securing  an  annuity  of  25/.  during  the  life  of  the  defendant.  The  defend- 
ant also  executed  an  assignment  of  his  half-pay  as  an  ensign  in  the  army 
as  a  collateral  security.  The  deeds  for  securing  the  annuity  have  been 
since  set  aside  in  the  Common  Pleas,  because  part  of  the  consideration  for 
which  the  annuity  was  granted  was  4G/.  19s.  9t7.  due  from  the  defendant  to 
the  plaintifl'  for  goods  previously  sold  by  the  plaintiff  to  him,  which  was 
not  specified  in  the  memorial  as  registered.  The  residue  of  the  considera- 
tion for  which  the  annuity  was  granted,  was  71/.  17s.  Cc?.,  paid  by  the 


SECT.  L]  JONES   V.   RYDE.  393 

plaintiff  to  the  defendant  in  oasih  at  the  time  of  granting  the  auuvuty.    The 
defendant  is  indebted  to  the  plaintiti'  in  42/.  for  goods  sold. 

The  question  for  the  opinion  of  the  court  is,  "Whether  the  plaintiff  is  en- 
titled to  recover  any,  and.  what,  sum  beyond  the  sum  of  42/.  % 

The  case  was  argued  ou  a  firnier  day  in  this  term  by  Wood  for  the  plain- 
tiff, and  Bower  for  the  defendant,  when  the  court  took  time  to  consider 
of  it. 

On  this  day  Ashhurst,  J.,  delivered  the  opinion  of  the  court. 

The  question  in  this  case  will  depend  on  the  construction  of  the  statute 
17  Geo.  3,  c.  26,  called  the  Annuity  Act.^  The  contract  was  strictly  legal, 
and  not  within  the  mischiefs  intended  to  be  remedied  by  the  act. 

The  security  then  is  set  aside,  not  on  account  of  any  fraud  or  defect  in 
the  contract  itself,  but  upon  a  formal  defect  in  making  the  memorial,  or  at 
least  it  was  an  innocent  mistake  of  the  law.  And  taking  that  to  be  the 
case,  when  the  security  was  vacated,  the  original  contract  revived.  If  in- 
deed the  sale  had  been  made  a  few  days  before  colorably,  and  with  a  view 
of  afterwards  stating  the  antecedent  debt  as  a  part  of  the  consideration  of 
an  annuity  intended  to  be  granted,  that  would  have  totally  altered  the 
case ;  but  as  it  is  to  be  taken  that  they  were  bona  fide  sold,  we  think  the 
plaintiff  is  entitled  to  recover  for  them. 

In  regard  to  the  money  paid  as  part  of  the  consideration ;  as  the  security 
is  not  set  aside  for  any  fraud  in  the  transaction,  but  merely  for  a  mistake 
or  omission  in  form,  it  becomes  unconscientious  in  the  party  to  retain  it, 
and  is  therefore  recoverable  on  the  count  for  money  had  and  received  to 
the  plaintiff's  use.  Therefore  we  are  of  opinion  that  the  plaintiff  is  entitled 
to  recover  for  his  whole  demand. 

Judgment  fo7' the  plaintif  IGOl.  17s.  3d. 


JONES  AND   Others  v.   RYDE  and  Another. 
In  the  Common  Pleas,  May  4,  1814. 

[Reported  in  5  Taunlon,  488.] 

This  was  an  action  of  assumpsit  for  money  had  and  received  which  was 
tried  at  the  sittings  in  London,  after  Michaelmas  term,  1813,  before  AFans- 
FlELD,  C.  J.,  when  a  verdict  was  found  for  the  plainlills,  damages  lUOU/., 
subject  to  a  case,  which  in  substance  was,  that  tiic  defendants,  wlio  were 
bill  brokers,  were  possessed  of  a  navy-bill  which  purported  to  have  been 
issued  by  the  traiisiKjrt  board,  and  to  bear  date  and  have  been  registered 
on  the  ITth  of  Jidy,  1813,  and  (o  1)C  payable  on  the  inih  of  October,  1813, 

1  So  inucli  of  lliu  opinion  as  lehitcH  to  the  «iucsti<jn  of  ('onstnutioii  lia.s  been 
omitted.  —  Ed. 


394  JONES   V.   EYDE.  [CHAP.  IL 

and  to  be  drawn  on  the  treasurer  of  the  navy  in  pursuance  of  a  charter- 
party  of  25th  June,  1808,  made  with  Messrs.  Bell  &  Hobbs  on  behalf  of  the 
owners  of  the  Wolga,  Ward,  master,  hired  to  serve  his  majesty  as  a  trans- 
port, for  payment,  ninety  days  after  date,  to  Bell  &  Hobbs  or  their  order, 
of  1875^.,  and  more  to  them,  for  interest  thereon,  from  7th  July  to  5th  October 
following,  when  that  bill  would  become  due,  being  90  days,  at  3d.  per  cent 
per  diem,  19/.  16s.  lOd.,  together  1884/.  I6s.  lOd. 


Deduct  property  tax 


£        s. 

d. 

lS8i    16 

10 

1     19 

9 

1883    m 

3 

In  both,  the  sum  of  1884/.  16s.  \M.  On  the  23d  of  August,  the  defend- 
ants discounted  this  bill  with  the  plaintifts,  who  were  stock  and  bill  brokers  ; 
they,  calculating  the  interest  upon  1883/.  16s.  3c/.,  the  apparent  amount  of 
the  bill,  for  53  days,  from  23d  August  to  15th  October  inclusive,  to  be  13/. 
13s.  6(/.,  then  paid  the  defendants  1870/.  2s.  %d.  as  the  difference,  and  re- 
ceived from  them  the  bill.  On  27th  August  the  plaintiffs  discounted  the 
same  bill  with  Williams,  who  calculating  the  interest  upon  the  same  ap- 
parent amount,  for  49  days,  from  that  day  to  the  15th  of  October,  to  be 
12/.  12s.  lOf/.  paid  them  1871/.  3s.  5c/.  as  the  difference,  and  received  from 
them  the  bill.  The  bill  issued  from  the  transport-office  for  884/.  16s.  10c/. 
only,  but  before  the  23d  of  August  some  person  had  altered  it  by  prefixing 
the  figure  1  to  the  figures  884/.  16s.  lOt/.,  and  883/.  16s.  3d.  in  the  several 
places  where  those  sums  occurred,  and  by  prefixing  the  same  figure  1  to 
each  of  the  dates  7th  July  and  5th  October,  so  that  before  and  when  it 
was  discounted  by  the  several  above-mentioned  parties,  who  wei-e  all  imcon- 
scious  of  the  alteration,  it  had  thereby  acquired,  in  the  particulars  altered, 
the  appearance  of  a  bill  for  the  net  sum  of  1883/.  16s.  3c/.  dated  17th  July 
and  payable  15th  October.  On  5th  October,  Williams  presented  it  at  the 
Navy  Pay  Office  for  payment,  which  was  refused  on  account  of  the  altera- 
tions; iipon  the  requisition  of  the  commissioners,  Williams  deposited  with 
them,  without  the  knowledge  of  the  defendants,  the  altered  bill ;  and  in 
lieu  of  it  accepted  from  them  a  new  bill  for  the  original  amount,  and  re- 
ceived in  discharge  thereof  883/.  16s.  3c/.  after  allowing  1/.  Os.  Id.  for  the 
property-tax  charged  on  the  interest.  Williams  thereupon  demanded  or 
the  plaintiffs  repayment  of  1000/.,  the  difference  between  the  sum  he  had 
received  from  the  Navy  Pay  Office  and  the  sum  he  had  paid  for  the  bill  to 
the  plaintiffs,  which  they  repaid  him,  and  brought  the  present  action  to 
recover  from  the  defendants  the  like  difference  of  1000/. 

Lens,  Serjt.,  for  the  plaintiffs. 

Vavghan,  Serjt.,  for  the  defendants. 

GiBBS,  C.  J.  This  is  very  distinguishable  from  the  case  of  Price  v.  Neal, 
because  there  the  bill  was  paid  by  the  person  who  of  all  others  was  the 


SECT.  l]  JONES   V.    RYDE.  395 

best  judge  whether  the  acceptance  was  his  handwriting  or  not,  and  he  says, 
on  looking  at  it,  this  is  ray  handwriting  and  I  pay  it.  The  case  of  Barber 
V.  Gingell,^  is  a  much  stronger  case  even  than  that.  It  was  an  action  on 
an  acceptance  written  in  the  name  of  Gingell ;  the  defendant  had  not  ac- 
cepted, nor  ever  acknowledged  that  he  had  accepted  that  bill ;  but  it  was 
proved  that  he  had  paid  bills  with  similar  acceptances,  which  in  fact  were 
forgeries  of  his  son;  and  Lord  Kenyon,  C.  J.,  held  that  the  defendant, 
having  given  credit  to  similar  acceptances  in  the  like  course  of  dealing,  was 
bound  to  pay  the  bill  in  question.  Tlie  court  are  of  opinion,  that  the 
plaintiff  is  entitled  to  recover  the  sum  he  seeks  to  recover  by  this  action  ; 
and  we  think  so  on  the  ground  on  which  it  is  put  by  my  Brother  Lens 
that  this  transaction  is  in  the  nature  of  an  exchange  between  the  two  par- 
ties, made  by  the  defendant  upon  the  one  hand,  of  a  navy  bill,  professing  to 
be  a  navy  bill  for  1884:/.  \6s.  lOd.,  and  the  defendant  representing  it  to  bo 
a  genuine  navy  bill  of  that  amount,  and  by  the  plaintifl'  on  tlie  other  liand, 
of  a  sum  of  money  equivalent  to  the  sum  which  would  be  paid  upon  that 
bill  when  it  should  become  due,  supposing  that  it  were  a  genuine  navy 
bill,  minus  the  interest  for  the  time  which  it  yet  had  to  run.  Both  parties 
were  mistaken  in  the  view  they  had  of  this  navy  bill ;  the  one  in  represent- 
ing it  to  be  a  navy  bill  of  this  description,  the  other  in  taking  it  to  be 
such.  Upon  its  afterwards  turning  out  that  this  bill  was  to  a  certain  ex- 
tent a  forgery,  we  think  he  who  took  the  money  ought  to  refund  it  to  the 
extent  to  which  the  bill  is  invalid.  The  ground  of  the  defendant's  resist- 
ance is,  that  the  bill  is  not  indorsed  ;  and  that  whensoever  instruments  are 
transferred  without  indorsement,  the  negotiator  professes  not  to  be  answera- 
ble for  their  validity.  This  question  was  much  mooted  in  Fenn  v.  Han-i- 
son ;  *  and  it  is  true  to  a  certain  extent,  viz.,  that  in  the  case  of  a  bill,  note, 
or  other  instrument  of  the  like  nature,  which  passes  by  indorsement,  if  he 
who  negotiates  it  does  not  indorse  it,  he  does  not  subject  himself  to  that 
responsibility  which  the  indorsement  would  bring  on  him,  viz.,  to  an  action 
to  be  brought  against  him  as  indorser ;  but  his  declining  to  indorse  the  bill 
does  not  rid  him  of  that  responsiliility  which  attaches  on  him  for  putting 
off  an  instrument  as  of  a  certain  description,  which  turns  out  not  to  be  such 
as  he  represents  it.  The  defendant  has  in  the  present  case  put  off  this  in- 
strument as  a  navy  bill  of  a  certain  description:  it  turns  out  not  to  be  a 
navy  bill  of  that  amount,  and  therefore  the  money  must  be  recovered  back. 
Bree  v.  Ilolbech  is  very  distinguishable.  Common  prudence  recpiired  an 
administrator  not  to  take  on  him  more  responsibility  than  his  situation 
obliged  him  to  incur,  viz.,  to  covenant  that  he  had  a  good  title  notwitli- 
standing  any  act  done  by  himself;  the  covenant  of  an  administrator  ordi- 
narily goes  no  further;  and  when  an  action  is  brought  against  him  for 
money  had  and  received,  ho  says,  you  have  all  the  security  against  mo 
which  a  person  in  my  situation  ever  gives,  and  that  does  not  in  the  pres- 
1  3  Esp,  60.  *  3  T.  i;.  757. 


396  JONES   V.   EYDE.  [CHAP.  II. 

ent  case  make  me  responsible.  Compare  this  with  the  case  of  Cripps  v. 
Eeade,-*  cited  by  my  Brother  Heath.  There  was  no  deed  :  tiie  whole 
rested  in  parol,  and  the  whole  was  founded  on  the  presumption  that  the 
title  was  such  as  it  purported  to  be  :  it  was  not  such  as  it  purported  to  be, 
and  therefore  the  purchase-money  could  not  be  retained.  In  the  present 
case,  the  navy  bill  is  not  such  as  it  purported  to  be,  and  therefore  the 
plaintiff  is  entitled  to  recover.  A  case  somewhat  similar  very  frequently 
occurs  in  practice  on  which  I  should  not  rely  as  governing  the  law,  but 
that  it  is  said  by  my  Brother  Lens  to  be  sanctioned  on  the  authority  of  a 
case  so  decided  at  iiisi  2->rius,  by  ALvnsfield,  C.  J.,  namely,  where  foi-ged 
bank  notes  are  taken.  The  party  negotiating  them  is  not,  and  does  not 
profess  to  be,  answei'able  that  the  Bank  of  England  shall  pay  the  notes  ; 
but  he  is  answerable  for  the  bills  being  such  as  they  purport  to  be.  There- 
fore the  plaintiff  must  recover  the  difference. 

Heath,  J.  I  am  of  the  same  opinion.  If  a  person  gives  a  forged  bank 
note,  there  is  nothing  for  the  money :  it  is  no  payment.  In  the  case  of 
Cripps  V.  Reade,  the  defendant  sold  a  term,  supposing  himself  to  be  the 
personal  representative  of  the  deceased,  without  executing  any  assignment. 
Eree  v.  Holbech  was  cited  upon  the  trial  before  Lawrence,  J.,  and  the  rule 
caveat  emptor  was  urged  :  the  court  refused  a  rule  for  a  new  trial.  Lord 
Kexyon,  C.  J.,  said  that  in  Bree  v.  Holbech  a  regular  conveyance  was 
made,  and  no  further  covenants  were  to  be  added  ;  but  in  the  case  of 
Cripps  V.  Reade,  the  whole  had  passed  by  parol,  and  the  money  had  been 
paid  under  a  mistake,  and  the  action  for  money  had  and  received  would 
lie  to  recover  it  back. 

Chambre,  J.  I  really  cannot  entertain  a  doubt  on  the  question  :  if  the 
defendant's  doctrine  could  prevail,  it  would  very  materially  impair  the 
credit  of  these  instruments.  They  are  not  in  practice  indorsed  (or  not  be- 
yond the  first  taker).  A  man  takes  this  security,  looking  to  the  persons 
who  are  to  pay  it ;  he  takes  it  on  the  presumption  that  it  is  a  navy  bill ; 
it  was  once  a  navy  bill,  but  from  the  moment  wherein  it  was  altered  it  be- 
came of  no  value  whatsoever.  It  is  unnecessary  to  go  into  the  authorities. 
I  agree  it  is  incumbent  on  the  plaintiff  to  show  quite  clearly  that  the  pay- 
ment of  the  884/.  16s.  10c?.  was  of  the  mere  bounty  and  liberality  of  gov- 
ernment, but  110  further.  Everything  that  the  plaintiffs  have  done,  has 
been  done  for  the  good  of  the  defendant.  There  is  no  doubt  whatever  that 
the  judgment  ought  to  be  for  the  plaintiffs. 

Dallas,  J.  This  is  a  case  in  which  the  parties  are  equally  innocent, 
and  have  equal  knowledge,  and  equal  means  of  knowledge.  I  have  no 
doubt  whatsoever  of  the  plaintiffs'  right  to  recover.  The  case  falls  not 
only  within  the  general  principle  that  where  a  man  has  paid  more  than  the 
thing  is  eventually  worth,  and  the  consideration  fails,  he  may  recover  it 
back,   but  also   comes   within  the  express  authority  of  Cripps  v.  Keade, 

1  6  T.  R.  606. 


SECT.  I.]  niTCHCOCK   V.   GIDDINGS.  397 

Upon  the  frroiind  therefore  that  the  money  was  in  part  paid  hy  mistake, 
upon  a  consideration  tliat  has  failed,  I  am  of  opinion,  that  the  ])hiintiffs  are 
entitled  to  recover  it  back.^ 

Jxidgmait  for  the  j^laintiffs. 


HITCHCOCK   i-.    GIDDIXGS. 

In  the  Exchequer,  June  4,  1817. 

[Reported  in  4  Price,  135.] 

The  plaintiff  by  the  present  bill  sought  to  be  relieved,  on  the  p-ound  of 
fraud,  against  a  bond  given  by  him  to  the  defendant  for  5000/.  as  the  con- 
sideration for  the  purchase  of  the  defendant's  interest  in  a  remainder  in 
the  real  estates  of  Thomas  ^lillard,  which  he  had  devised  b}-  his  will  to 
Elizabeth  Millard  and  Anne  Wrentmore  for  life ;  remainder  to  Anne  Wrent- 
more  Colmer  in  tail,  remainder  to  F.  and  T.  Yowles  in  fee  ;  —  and  for  an 
injunction  to  restrain  the  defendant  from  putting  the  bond  in  suit  in  the 
mean  time,  under  the  following  circumstances  :  — 

The  defendant,  in  1805,  had  purchased  that  remainder  in  fee,  of  the 
persons  then  entitled  to  it.  In  1810  he  agreed  to  sell  a  moiety  of  his 
interest  to  the  plaintiff  for  5000/.,  who,  though  apprised  by  his  professional 
adviser  of  the  possibility  of  the  devisee  in  tail  suffering  a  recovery,  which 
she  might  do,  whereby  the  entail  would  be  barred,  and  the  remainder 
destroyed,  still  insisted  on  his  purchase  (having  in  the  mean  time  directed 
a  search  to  be  made,  to  assure  himself  that  no  recovery  had  been  suffered), 
expressing  himself  satisfied,  and  that  he  thought  it  worth  10,000/.  The 
defendant,  on  the  10th  !May,  1810,  executed  to  him  a  proper  conveyance 
of  his  interest ;  and  the  plaintiff  at  the  same  time  signed  the  bond  in 
question. 

In  the  course  of  the  next  month,  the  plaintiff's  solicitor  discovered  that 
a  recovery  had  been  duly  suffered  by  Miss  Colmer  in  Easter  term,  1S08, 
of  which  he  soon  afterwards  informed  the  plaintiff. 

The  defendant,  by  his  answer,  denied  all  knowledge  of  the  recovery 
having  been  suffered  when  he  executed  the  conveyance  ;  and  he  proved 
that  the  purchase  had  originated  with  tlie  plaintiff,  and  that  he  liad  refused 
to  sell  him  the  other  moiety  on  his  request.  The  plaintifl'  had  paid  250/. 
for  interest  on  the  bond,  which  ho  now  j)rayed  might  be  repaid  to  him. 

Fo)iJ>hii)qiie  and  WiiKjfichl  for  tlie  |ilaintiff. 

Martin  and  I/ri/s  f<jr  the  dcfcMidant. 

KiCHARDS,  Chief  Baron,  'i'his  is  certainly  a  charge  of  fniud  :  for  it  is, 
that  the  defendant,  having  no  title  to  any  interest  in  these  estates  at  tho 
time  of  the  contract,  bargained  as  if  lie  had  ;  .and  that  thereby  lie  [ircvailed 

»  Lcuds  Bank  v.  Walker,  11  Q.  15.  I).  84,  accord.  —  Kl». 


398  HITCHCOCK   V.    GIDDINGS.  [CHAP.  II. 

on  the  plaintiff  to  give  him  this  bond.  That  is,  without  doubt,  what  we 
call  a  fraud  in  courts  of  equity. 

Then  it  is  put  that  this  transaction  was  an  agreement  for  the  purchase 
of  a  mere  contingency ;  and  if  the  court  saw  that  it  were,  they  might  not 
be  disposed  to  assist  the  plaintiff;  for  if  a  man  should  be  foolish  enough  to 
make  a  purchase  of  such  a  chance,  he  must  perhaps  abide  by  the  consequence 
of  his  rashness.  But  the  fact  was  not  so  here.  Under  the  will  of  the 
testator,  the  persons  making  title  to  the  defendant  had  a  vested  remainder 
in  fee  simple,  which  would  have  vested  in  possession  if  it  had  not  been  in 
the  mean  time  barred  by  a  common  recovery.  Both  pai'ties,  at  the  time  of 
the  contract,  treated  on  the  supposition  that  a  recovery  had  not  then  been 
suti'ered.  The  whole  of  the  evidence  shows  that  that  was  the  object  in 
contemplation  of  the  purchaser.  If  no  recovery  had  been  then  suti'ered, 
the  defendant  had  a  remainder ;  if  there  had,  he  had  no  sort  of  interest 
whatever.  But  they  agreed  for  the  sale  of  the  remainder,  subject  to  the 
subsequent  possible  contingency  of  there  being  no  recovery  suflered.  Now, 
if  a  person  sell  any  estate,  having  no  interest  in  it  at  the  time,  and  takes  a 
bond  for  securing  the  payment  of  the  purchase-money,  that  is  certainly  a 
fraud,  although  both  parties  should  be  ignorant  of  it  at  the  time ;  and  that 
I  believe  to  have  been  the  case  here.  A  contingency  may  certainly  be  sold 
on  speculation,  but  not  such  as  was  sold  here.  Two  parties  are  not  to  be 
allowed  to  enter  into  an  agreement  to  deceive  each  other.  But  there  was 
not  even  a  contingency  sold  here ;  it  was  not  selling  an  interest,  subject  to 
a  chance,  for  the  defendant  had  no  interest  at  all  to  which  a  chance  could 
attach. 

I  must  not  be  told  that  a  court  of  equity  cannot  interfere  where  there  is 
no  fraud  shown.  If  contracting  parties  have  treated  while  under  a  mistake, 
that  will  be  sufficient  ground  for  the  interference  of  a  court  of  equity ;  but 
in  this  case  there  is  much  more.  Suppose  I  sell  an  estate  innocently,  which 
at  the  time  is  actually  swept  away  by  a  flood,  without  my  knowledge  of  the 
fact,  am  I  to  be  allowed  to  receive  5000/.  and  interest,  because  the  convey- 
ance is  executed,  and  a  bond  given  for  that  sum  as  the  purchase-money,  when, 
in  point  of  fact,  I  had  not  an  inch  of  the  land,  so  sold,  to  sell  %  That  was 
precisely  the  case  with  the  present  defendant ;  and  it  would  be  hard,  indeed, 
if  a  court  of  equity  could  not  interfere  to  relieve  the  purchaser. 

I  am  therefore  clearly  of  opinion,  that  this  bond  must  be  relieved  against. 
Bonds  are  not  conclusive,  as  has  been  said,  though  they  may  be  used  to 
show  that  the  party  had  acted  deliberately ;  but  wherever  it  can  be  made 
appear  that  they  were  not  fairly  taken,  or  that  the  money  was  not  satisfac- 
torily due,  courts  of  equity  will  order  them  to  be  cancelled ;  for  they  will 
not  suffer  a  party  to  recover  on  a  bond  against  which  a  defendant  has  no 
defence  at  law,  although  it  were  given  without  such  a  consideration  as 
would  entitle  the  plaintiff  at  law  to  receive  the  money,  the  payment  of 
which  it  is  given  to  secure.     That  is,  undoubtedly,  the  present  case.     And 


SECT.  L]  bank    of   ENGLAND   V.   TOMKINS.  399 

if  more  had  been  done  here,  —  if  the  money  had  been  paid  into  court,  — 
the  defendant  wouhl  not  have  been  permitted  to  take  it  out,  if  the  phiintitT 
could  have  shown,  as  he  does  now,  that  at  the  time  of  the  sale  the  defendant 
had  no  interest. 

Then  as  to  the  money  which  has  been  already  paid  ;  the  same  equity 
which  attaches  to  the  bond,  must  also  attach  to  the  interest  which  has 
been  paid  on  it ;  for  if  an  application  for  an  injunction  had  been  made 
immediately,  it  must  have  been  granted,  and  then  no  interest  would  have 
accrued. 

As  to  the  costs, — as  both  parties  have  acted  very  foolishly,  and  are  equally 
to  blame,  I  shall  not  give  costs  on  either  side;  although  tlio  defendant  may 
have  been  wrong  in  resisting  so  reasonable  an  application. 

The  bond  must  be  delivered  up  to  be  cancelled,  and  the  interest  which 
has  been  paid  on  it  by  the  plaintilf  must  be  refunded  by  the  defendant. 

Decree. 


BANK   OF   ENGLAND   v.  TOMKINS. 
In  the  Exchequer,  April  21,  1842. 

[Reported  in  6  Jurist,  347.] 

Assumpsit  for  money  lent.  Plea,  7ion  assumpsit.  (There  were  other 
counts  and  pleas,  but  nothing  turned  on  them.)  At  the  trial  before  Lord 
Abinger,  C.  B.,  it  appeared  that  this  was  an  action  brought  to  recover  a 
sum  of  8000/.  under  the  following  circumstances  :  —  The  defendant  had 
deposited  with  the  Bank  of  England  eleven  exchequer  bills  for  1000/.  each, 
on  which  the  bank  advanced  him  11,000/.,  with  an  agreement,  that,  if  the 
money  were  not  repaid  within  a  given  time,  the  bank  should  be  at  liberty 
to  sell  the  bills.  3000/.  was  repaid  within  the  period  specified,  and  three 
of  the  bills  returned,  but  defaidt  having  been  made  in  the  payment  of  the 
residue,  the  bank  sold  the  eight  remaining  ones  for  8000/.  On  the  holder 
presenting  these  bills  at  the  exchequer  office,  the  signatures  to  tlieni  wcro 
pronounced  to  be  forgeries,  and  payment  refused  accordingly ;  and  the  bank, 
being  compelled  to  indemnify  the  holder,  bnMight  the  present  action.  It 
appeared,  by  the  evidence  on  the  part  of  the  plaintifl's,  that  the  nianufacturo 
ami  issue  of  exchequer  bills  were  regulated  by  Stat.  4  <k  5  Will.  4,  c.  1.^),  s.  4, 
and  the  treasury  regulations  made  in  pursuatice  thereof;  atid  that  the  only 
persons  authorized  to  sign  such  bills  were  the  controller  and  ilcputy  con- 
troller of  the  exchequer,  both  of  whom  were  examined  nt  tlio  trial,  and 
declared  the  signatures  to  the  bills  in  question  to  bo  forged.  On  cross- 
examination,  the  practice  in  the  exchequer  bills  office,  in  the  manufacture 
of  exchequer  bills,  appeared  to  be,  that  paper  with  a  peculiar  watermark 


400  BANK   OF   ENGLAND   V.    TOMKINS.  [CHAP.  II. 

was  manufactured  for  the  purpose;  they  were  afterwards  stamped  or  printed 
in  a  particular  place  set  apart  in  the  office  ;  they  were  then  dated  and 
numbered,  in  general,  by  two  clerks,  one  of  whom  numbered  the  bill,  the 
other  the  counterfoil ;  but  sometimes,  in  the  absence  of  cither  clerk,  the 
whole  was  done  by  one  alone.  They  were  then  taken  to  the  controller  or 
his  deputy  for  signature;  having  received  which,  they  were  in  a  fit  state  to 
be  issued.  It  appeared  also,  that  a  clerk,  of  the  name  of  Smith,  whose 
duty  it  was  to  number  the  bills,  had  the  custody  of  the  manufactured  paper, 
and  access  to  the  bills  after  they  were  printed,  and  also  to  the  seal ;  and 
that  there  was  no  person  in  tlie  office  to  act  as  a  check  on  his  conduct ; 
and,  lastly,  that  the  present  bills  were  genuine  in  all  points  except  the 
signature.  On  this  evidence.  Lord  Abinger  told  the  jury,  that  the  only 
question  for  their  consideration  was,  whether  the  signatures  to  these  bills 
were  forged  or  not;  for  that,  if  they  were  forged,  the  plaintiffs  were  entitled 
to  recover;  and  the  jury  found  for  the  plaintiffs  for  the  amount  claimed. 

E7-le  moved  for  a  new  trial,  on  the  ground  of  misdirection.  The  true 
question  for  the  jury  was  not,  simply,  whether  these  signatures  were  forged, 
but  whether  the  exchequer  office  was  not  bound  to  pay  these  bills ;  for,  if 
they  were,  there  would  be  no  failure  of  consideration,  and  the  present  action 
could  not  be  supported.  Now,  the  liability  of  the  exchequer  office  is  not 
inconsistent  with  these  signatures  being  forged,  inasmuch  as  the  bills  are 
issued  on  their  own  paper,  and  with  their  own  stamp  and  seal ;  and  it  is 
owing  to  their  negligent  course  of  business  in  their  office  that  money  has 
been  advanced  on  their  bills.  An  action,  perhaps,  may  not  lie  against  the 
office,  but  the  principle  is  the  same,  if  these  bills  were  such  as  ought  to  be 
paid  in  the  regular  course  of  business. 

Parke,  B.  It  appears  to  me  very  clear,  that  no  rule  ought  to  be  granted 
in  this  case.  The  question  is,  can  the  plaintiff's  maintain  this  action  for 
money  lent  and  advanced,  on  the  ground  that  they  have  not  received  from 
the  defendant  that  which  they  bargained  fori  And  I  am  of  opinion  that 
they  can.  The  bargain  they  made  was  for  marketable  exchequer  bills  good 
in  all  respects,  duly  signed,  sealed,  and  stamped,  and  which  would  be  im- 
mediately paid  on  being  presented  at  the  exchequer  office.  The  defendant's 
argument  is,  that  the  exchequer  office  is  bound  to  pay  these  bills  in  their 
present  state;  namely,  good  in  three  of  the  essential  requisites,  but  bad  in 
the  fourth,  as  having  a  forged  signature.  Now  that  is  a  question  which 
we  are  not  at  all  called  on  to  determine  at  present.  AVhenever  it  comes 
before  the  proper  tribunal  it  will  be  decided ;  it  is  enough  for  us  to  say 
that  the  plaintiffs  did  not  bargain  for  a  bill  imperfect  in  any  respect,  or 
which  might  be  enforceable  against  the  exchequer  by  petition  of  right  or 
otherwise,  but  for  a  bill  good  in  all  respects,  and  which  would  at  once  be 
paid  or  exchanged  in  the  usual  course  and  practice  of  the  office.  Now  it 
is  abundantly  clear  that  this  is  not  such  a  bill,  that  the  plaintiffs  have, 
therefore,  not  got  what  they  bargained  for,  and  are  therefore  entitled  tobe 


SECT.  l]  GOMPERTZ  V.   BARTLETT.  401 

repaid  their  money.     There  certainly  may  be  something  iu  the  nature  of 
a  case  against  the  exchequer  for  neghgence. 

ALDEiisoN,  B.  The  bank  iu  this  case  bargained  for  an  exchequer  bill 
right  and  good  in  all  respects,  not  a  bill  which  might  by  possibility  be  paid 
at  the  exchequer,  although  the  signature  to  it  was  a  forgery.  Now  it  is 
clear  that,  in  one  at  least  of  the  four  requisites  to  a  good  exchequer  bill, 
namely  the  validity  of  the  signature,  these  bills  are  imperfect ;  suppose  they 
had  been  deficient  in  two  or  three  of  those  requisites,  would  it  still  be  con- 
tended that  the  presence  of  the  fourth  rendered  them  what  the  bank 
bargained  fori 

GuRXEY,  B.  This  is  precisely  similar  to  the  case  of  a  bank  clerk  getting 
the  bank  paper  into  his  possession,  and  of  it  manufacturing  a  note  complete 
in  every  respect  except  the  cashier's  signature,  which  is  forged. 

PiOLFE,  B.  Supposing  the  defendant's  proposition  in  this  case  to  be 
correct,  namely,  that  an  action,  or  something  in  the  nature  of  one,  might  bo 
maintained  against  the  exchequer  with  respect  to  this  bill,  such  a  proceeding 
would  be  founded,  not  on  the  principle  that  this  was  a  valid  bill,  but  ou 
the  ground  that  those  into  whose  hands  it  came,  had  been  misled  by  the 
conduct  of  the  exchequer  office. 

Eule  refused. 


HENRY  GOMPERTZ   v.   THOMAS   BARTLETT. 
In  the  Queen's  Bench,  November  1-i,  1853. 

[Reported  in  2  Ellis  Sf  BlacBurn,  849.] 

Action  for  money  had  and  received.  Plea:  Never  indebted.  Issue 
thereon. 

On  the  trial,  before  Lord  Campbell,  C.  J.,  at  the  sittings  at  Guildhall 
after  last  Trinity  term,  it  appeared  that  the  defendant,  iu  London,  sold  to 
the  plaintiir  a  bill  of  exchange  purporting  to  bo  drawn  at  Sierra  Leone  by 
Jolly  &  Co.,  of  that  place,  on  Bellot  &  Co.,  of  London,  and  accepted  by 
Bellot  &  Co.,  payable  to  the  order  of  a  third  person  iu  London.  The  in- 
strument was  indorsed  in  blank  by  the  payee  ;  it  was  unstamped  ;  but 
both  parties  believed  it  to  be  a  foreign  bill,  and  consequently  to  require  no 
stamp.  The  defendant  did  not  indorse  the  bill ;  and  it  was  a  sale  without 
recourse.  The  plaintiff  paid  815/.  to  the  defendant,  as  the  price  of  the  bill, 
which  was  handed  to  plaintiff;  and  he,  in  like  main)er,  sold  the  bill  to 
another  person,  also  without  recourse.  Before  the  bill  attaiiuHl  maturity, 
nil  the  parties  to  the  bill  became  bankrupt.  On  the  bol.ler  seeking  to 
prove  against  the  estate  of  the  acceptor,  it  was  di.scovered  that  tlio  bill, 
though  bearing  the  geiiuiue  signature  of  a  Sierra  Leone  firm,  hail,  in  fact, 
been  drawn  by  one  of  the  jiartners  in  this  kingdom,  and  ct)nseqMeiitIy  was 

26 


402  GOMPERTZ   V.    BAETLETT.  [CHAP.  II. 

unavailable  for  want  of  a  stamp.  The  Commissioners  in  Bankruptcy  re- 
fused to  allow  the  proof.  The  holder  demanded  back  from  the  plaintiff 
the  price  paid  to  him ;  and  the  plaintiff,  under  threat  of  legal  proceedings, 
paid  him.  The  plaintiff  now  sought  to  recover  from  the  defendant  815/., 
the  price  of  the  bill,  as  money  paid  on  a  consideration  which  had  failed. 
It  was  admitted  that  the  defendant,  at  the  time  of  the  sale,  bo7ia  fide  be- 
lieved the  bill  to  have  been  drawn  at  Sierra  Leone ;  and  neither  fraud  nor 
negligence  was  imputed  to  him. 

The  Lord  Chief  Justice  directed  a  nonsuit,  with  leave  to  move  to  enter 
a  verdict  for  the  plaintift".  Petersdorff,  in  this  term,  obtained  a  rule  nisi 
accordingly. 

M.  Chambers  and  Pearson  now  showed  cause. 

Petersdorff,  contra. 

Lord  Campbell,  C.  J.  —  At  the  trial,  I  was  impressed  with  the  consid- 
eration that  this  was  a  transaction  of  pure  sale,  and  that  the  vendor  really 
had  title  to  the  bill  which  he  sold,  and  was  perfectly  ignorant  of  the  latent 
defect.  Besides,  the  bill  would  probably  have  in  fact  been  paid  had  the 
parties  to  it  continued  solvent ;  and  on  the  whole  I  was  then  inclined  to 
think  that  the  defect  was  merely  one  in  the  quality,  which  the  vendor  did 
not  warrant.  But,  now,  having  heard  the  argument,  I  think  that  the  action 
is  maintainable,  on  the  ground  that  the  article  does  not  answer  the  descrip- 
tion of  that  which  was  sold,  viz.,  a  foreign  bill.  There  was  no  written 
statement  or  direct  assertion  that  this  bill  was  drawn  at  Sierra  Leone ;  but 
it  purported  to  be  so  drawn  ;  and  it  must  be  taken  that  it  was  sold  by  the 
description  of  a  bill  drawn  at  Sierra  Leone.  In  fact  it  was  drawn  in  Lon- 
don ;  and,  on  that  account,  it  could  not  be  enforced.  If  it  really  had  been 
a  foreign  bill,  any  secret  defect  would  have  been  at  the  risk  of  the  pur- 
chaser ;  but  this  is  not  a  case  in  which  an  article  answering  the  description 
by  which  it  is  sold  has  a  secret  defect,  but  one  in  which  the  article  is  not 
of  the  kind  which  was  sold.  I  think,  therefore,  that  the  money  paid  for  it 
may  be  recovered  as  paid  in  mistake  of  facts.  The  law  is,  I  think,  accu- 
rately laid  down  in  the  passage  cited  from  Addison  on  Contracts.  If,  being 
what  was  sold,  the  bill  was  valueless  because  of  the  insolvency  of  the  par- 
ties, the  vendor  would  not  be  answerable ;  but  he  is  answerable  if  the  bill 
be  spurious.  Jones  v.  Eyde  and  Young  v.  Cole  are  strongly  in  point.  Young 
V.  Cole  is  indeed  a  very  strong  case ;  for  the  things  sold  there  as  Guatemala 
bonds  were  in  one  sense  of  the  words  Guatemala  bonds ;  but  they  were  not 
what  was  professed  to  be  sold,  viz.,  bonds  binding  on  the  Guatemala  Gov- 
ernment. The  case  is  precisely  as  if  a  bar  was  sold  as  gold,  but  was  in 
fact  brass,  the  vendor  being  innocent.  In  such  a  case  the  purchaser  may 
recover. 

Coleridge,  J.  I  am  of  the  same  opinion.  "What  took  place  at  the  time 
of  the  sale  was  merely  that  the  vendor  did  not  indorse  the  bill,  and  stipu- 
lated in  effect  that  this  should  be  a  sale  without  warranty.     That  being  so, 


SECT.  L]  MUNT    V.    STOKES.  403 

the  vendor  was  not  bound  to  see  that  he  sold  a  bill  of  good  quality,  or  to 
answer  fur  the  insolvency  of  the  parties;  but  the  vendee  is  still  entitled  to 
have  an  article  answering  the  description  of  that  which  he  bought.  Hero 
he  bought,  as  a  foreign  bill,  what  turns  out  nut  to  be  a  foreign  bill,  and 
therefore  valOeless.  Common  justice  requires  that  he  should  have  back 
the  price. 

WiGHTMAX,  J.  I  agree  upon  this  ground,  that  what  was  sold  purported 
to  be  a  bill  drawn  at  Sierra  Leone  and  available  against  the  parties  to  it, 
but,  so  far  from  answering  that  description,  was  a  bill  not  drawn  at  Sierra 
Leone,  but  in  England,  and,  being  unstamped,  was  unavailable.  "Wherever 
the  article  answers  the  description  by  which  it  is  sold,  and  it  turns  out  that 
there  is  a  latent  defect,  in  the  absence  of  fraud  and  warranty,  the  vendee 
must  take  it  with  all  faults.  But  this  is  a  case  in  which  it  does  not  answer 
the  description.  And  therefore  on  the  autliorities,  more  especially  on  that 
of  Jones  V.  Eyde,  the  plaintiff  is  entitled  to  recover.^ 

Bule  absolute. 


(g.)  There  must  be  an  uvjust  Enrichment  of  Defendant  at  Plaintiff's  Expense. 

MUNT  AND  Another,  Executors,  &c.  v.   STOKES   and  Another. 

In  the  King's  Bench,  February  7,  1792. 

[^Reported  in  4  Term  Reports,  561.] 

This  was  an  action  to  recover  2004/.  3s.  id.  for  money  had  and  received 
by  the  defendants  for  the  use  of  the  plaintiffs  as  executors  of  A.  M'lntosh : 
the  defendants  pleaded  the  general  issue  ;  and  at  the  trial  a  special  case 
was  reserved,  stating  the  following  facts  :  — 

In  January,  178.5,  the  plaintiffs'  testator,  Alexander  M'lntosh,  was  at 
Calcutta  in  Bengal,  in  the  East  Indies,  with  the  ship  Hussar,  carrying 
Danish  colors,  whereof  he  was  at  that  time  master  and  owner.  \\y  the 
laws  of  Denmark,  all  persons  who  are  masters  of  ships  belonging  to  Dan- 
ish ports,  and  carrying  the  Danish  flag,  must  be  eitiier  natural-born  sub- 
jects of  the  kingdom  of  Denmark,  or  become  denizeua  of  Denmark,  and  take 
the  oaths  of  allegiance  to  the  king  of  Denmark.  On  the  Gth  of  January, 
1785,  M'lntosh  borrowed  at  Calcutta  of  the  defendants  (being  British  sub- 
jects) 20,000  current  rupees  upon  the  terms  mentioned  in  the  condition  of 
a  respondentia  bond  (which  was  stated).  The  condition  (after  reciting  that 
M'lntosh  had  taken  up  and  received  of  the  defendants  20,000  current 
rupees,  making  21 06/.,  13».  id.  to  run  at  respondentia  on  the  ship  Hus-sar, 
of  which  M'lntosh  was  the  commander,  ami  her  guns,  arniH,  nmninnitiun. 
stores,  etc.,  and  also  upon  the  goods  and  merchandises  laden  and  to  be 
1  Eric,  J.,  had  gone  to  Chamboi-a. 


404  MUNT   V.   STOKES.  [CHAP.  IL 

laden  on  board  duriug  her  voyage  bound  from  Calcutta  from  out  of  the 
river  Hoogly  to  the  coast  of  Coromaudel,  and  thence  to  proceed  for  and 
arrive  at  Copenhagen  iu  Denmark,  being  to  sail  on  the  31st  of  January 
frona  out  of  the  river  Hoogly,  at  the  rate  of  10/.  per  cent  for  the  voyage) 
was,  that  if  the  Hussar  did  sail  on  the  above  voyage,  and  arrive  at  Copen- 
hagen before  the  end  of  nine  months,  to  be  computed  from  the  day  of 
leaving  Calcutta,  when  also  the  risk  of  the  respondentia  lender  commenced; 
and  if  M'Intosh,  his  heirs,  executors,  etc.,  before  the  end  of  nine  months, 
etc.,  paid  to  the  defendants,  etc.,  the  principal  sum  of  21G6/.  13s.  4c/.  in 
Loudon,  together  with  the  premium  of  10/.  per  cent  for  the  voyage,  if  the 
same  were  performed  within  nine  months,  etc.,  antl  if  any  longer,  pro  rata  : 
iu  consideration  of  which  premium,  the  usual  risk  of  rivers,  violence  of  the 
seas,  etc.,  was  to  be  on  account  of  the  defendants ;  and  in  case  of  the  loss  of 
the  ship,  M'Intosh,  his  heirs,  executors,  etc.,  did  within  six  months  next 
after  such  loss,  or  as  soon  after  as  such  average  should  be  ascertained,  pay 
to  the  defendants  such  average  or  proportion  as  by  citstom  should  become 
due  on  the  salvage,  then  the  obligation  was  to  be  void.  A.  M'Intosh 
soon  afterwards  sailed  in  the  ship  the  Hussar,  with  Danish  colors,  from 
Calcutta  to  the  coast  of  Coromaudel,  and  there  took  goods  on  board,  and 
from  thence  sailed  for  Copenhagen.  In  December,  1785,  A.  M'Intosh  died, 
having  first  made  his  will,  and  appointed  the  plaintiffs  and  four  others 
executors.  The  plaintiffs  alone  proved  the  will  in  the  prerogative  court 
of  Canterbury.  On  12th  October,  1786,  the  plaintiffs,  upon  application  to 
them  by  the  defendants,  paid  to  the  defendants  2004/.  35.  id.  in  discharge 
of  the  bond  so  entered  into  by  M'Intosh. 

Romilhj,  for  the  plaintiffs. 

Lord  Kenyon,  C.  J.  (stopping  Law,  contra.)  —  It  has  been  said  that 
this  was  not  a  debt  which  the  plaintifls  were  bound  in  conscience  to  pay  to 
the  defendants :  but  I  think  that  they  were  bound  both  in  honor  and  con- 
science to  refund  the  money  which  the  defendants  had  advanced,  though 
the  original  contract  were  contrary  to  a  positive  law ;  for  this  is  not  a  pen- 
alty, but  money  which  the  defendants  had  actually  advanced.  And  the 
original  contract  was  not  malum  in  se,  but  vialum  prohibitum.  Though 
the  security  on  which  this  money  was  borrowed  was  void  by  the  statute,  I 
do  not  know  but  that  an  action  for  money  had  and  received  might  have 
been  maintained  by  the  defendants  to  recover  back  this  money ;  the  cases 
cited  relative  to  premiums  go  a  great  way  to  show  that.  But  the  ground 
on  w^hich  I  go  is  this,  that  there  was  no  misrepresentation  or  any  improper 
conduct  by  the  defendants  to  extort  the  money  from  the  plaintiffs  ;  but  the 
plaintiffs,  knowing  the  whole  transaction,  and  the  law  also,  as  they  were 
bound  to  know,  voluntarily  paid  it.  There  was  nothing  contrary  to  con- 
science in  the  defendants  receiving  the  money,  which  they  had  advanced  ; 
the  plaintifls  therefore  are  not  entitled  either  in  law  or  in  equity  to  recover 
it  back  again.     This  is  not  like  a  case  which  I  remember  many  years  ago, 


SECT.  I.]  PLATT  V.    BEOMAGE.  405 

where  an  action  was  brought  to  recover  the  excess  of  a  copyhold  fine  : 
there  it  was  held  that  the  money  might  be  recovered  back  in  un  action  for 
money  had  and  received  against  the  steward,  because  he  had  used  coercion 
to  obtain  payment  of  the  excessive  fine  ;  lie  would  not  deliver  the  title- 
deeds  without.  Nor  is  this  a  case  of  singular  hardship  against  the  execu- 
tors ;  for  where  executors  pay  a  debt  of  an  inferior  nature,  though  con- 
scientiously, and  without  any  view  to  prefer  one  creditor  to  another,  the 
loss  must  be  borne  by  them  individually,  if  the  assets  be  insufficient  to  pay 
all  the  debts  of  a  higher  nature.  Without  going  into  the  question  of 
form,  upon  which  I  should  be  sorry  to  have  the  case  decided,  I  am  clearly 
of  opinion  that  on  the  merits  the  plaintiffs  are  not  entitled  to  recover. 

BuLLER,  J.  —  In  the  case  of  illegal  contracts,  one  party  cannot  recover 
against  the  other  on  the  contract  itself;  but  if  he  come  to  rescind  the  con- 
tract, he  may  recover  back  so  much  money  as  has  been  paid.  This  was 
established  in  Jaques  v.  Golightly,  and  in  Lowry  v.  Bourdieu.*  If  the 
party  come  into  a  court  of  justice  to  enforce  an  illegal  contract,  two 
answers  may  be  given  to  his  demand  :  the  one,  that  he  must  draw  justice 
from  a  pui-e  fountain ;  and  the  other  that  potior  est  conditio  j^ossideutis. 
Such  would  have  been  this  case  if  the  plaintiffs  had  not  paid  the  money, 
and  an  action  had  been  brouglit  on  the  contract ;  but,  the  plaintifls  having 
paid  it,  the  question  is,  whether  the  defendants  retain  the  monc}-  against 
conscience  1  I  think  they  do  not,  because  they  have  only  received  back 
the  money  which  they  had  before  advanced  to  the  plaintiffs'  testator.  I 
also  think  that  the  point  of  form  is  against  the  plaintiffs  ;  they  should 
have  declared  in  their  own  right,  and  not  as  executors.  At  all  events,  if 
the  action  be  brought  by  the  executors,  all  of  them  should  have  joined  ; 
and  this  is  a  defect  in  the  plaintiffs'  title.  Where  indeed  several  are 
named  executors,  and  one  only  proves  the  will  and  acts,  that  one  is  liable 
to  an  action  ;  but  he  cannot  sue  alone  until  the  others  have  renounced. 

Postea  to  the  defendants. 


TLATT  V.   BROMAflE   and  An-other. 
In  the  Exchequer,    November  20,  1854. 

\Tifjiorlcd  in  24  Law  Jonrnul,  03  ] 

This  was  an  action  by  the  jilaintiff  as  assignee  of  the  estate  and  effects 
of  John  Jones,  an  insolvent.  The  first  count  was  in  trover,  for  converting 
the  goods  of  the  insolvent  bcfure  his  insolvency,  and  the  second  count  was 
for  money  payable  to  the  ])liiiiitiff  as  assignee,  for  money  received  by  the 
defendants,  to  the  use  of  John  Jones,  before  his  insolvency.     The  defend- 

>  Dongl.  468,  U  EJ. 


406  PL  ATT   V.   BEOMAGE.  [CHAP.  n. 

ants  pleaded  Not  guilty,  Not  possessed,  Leave  and  license,  Never  indebted, 
and  other  pleas. 

At  the  trial,  before  Williams,  J.,  at  the  Breconshire  Spring  Assizes  in 
last  year,  the  facts  appeared  to  be  these:  —  In  October,  1850,  John  Jones, 
the  insolvent,  a  farmer  residing  at  Llangoed  farm,  in  the  county  of  Brecon, 
being  indebted  to  the  defendants,  Messrs.  Bromage  &  Suead,  who  were 
bankers  at  Brecon,  in  660/.,  for  money  advanced  by  them  to  him,  assigned 
to  them  his  stock,  crops,  etc.,  at  Llangoed,  by  way  of  mortgage,  fur  secur- 
ing that  sum  and  interest.  Shortly  afterwards,  Jones  took  a  smaller  fVxrm, 
called  "  Tregunter,"  where  he  continued  till  September,  1852,  when  his 
difficulties  increasing  and  the  debt  to  the  defendants  being  unpaid,  the 
latter,  with  the  consent  of  Jones,  took  possession  of  and  sold  the  stock, 
crops,  etc.,  at  Tregunter,  together  with  a  quantity  of  wheat,  to  which  he 
was  entitled  as  outgoing  tenant  of  Llangoed  farm.  It  appeared  probable 
that  the  insolvent  had  assented  to  the  sale  of  his  stock  and  crops  on  Tre- 
gunter farm,  under  the  belief  that  the  defendants  were  entitled  to  sell  it 
under  the  assignment.  Under  these  circumstances,  it  was  contended,  on 
behalf  of  the  plaintiff,  that  he  was  entitled  to  recover  in  respect  of  the 
stock,  crops,  etc.,  in  Tregunter,  on  the  ground  that  they  did  not  pass  to 
the  defendants  under  their  assignment.  The  learned  judge  reserved  the 
point,  and  the  defendants  had  a  verdict,  leave  being  reserved  to  the  plain- 
tiff to  move  to  enter  a  verdict  for  him. 

J.  Evans  now  moved  accordingly  (Nov.  7),  and  renewed  the  objection 
taken  at  the  trial. 

Per  Curiam}     We  will  consult  the  learned  judge  who  tried  the  cause. 

Cur.  adv.  vult. 

Pollock,  C.  B.,  now  said  :  This  was  a  case  in  which  a  rule  was  moved 
for  by  Mr.  Evans.  The  facts  were  of  this  kind  :  The  plaintiff,  as  assignee 
of  an  insolvent  John  Jones,  claimed  to  recover  certain  effects  sold  to  pay  a 
debt  due  to  the  defendants,  who  were  bankers  at  Brecon.  The  defendants, 
Messrs.  Bromage  &  Snead,  had  had  assigned  to  them,  to  secure  certain  ad- 
vances made  by  them,  all  the  property  in  a  certain  farm  called  "  Llangoed 
Farm  ; "  the  assignment  also  contained  expressions  sufficient  to  include 
future-acquired  property ;  but  that  could  not  be  done,  the  law  not  admit- 
ting of  anything  being  assigned  by  deed,  except  that  which  actually  exists. 
Then  the  defendants  applied  to  have  the  security  rendered  available  en- 
tirely with  the  consent  of  the  insolvent ;  whereupon  the  property  thai  was 
in  the  security  was  sold,  and  that  not  being  sufficient,  also  a  seizure  was 
made  upon  another  farm,  called  "  Tregunter,"  entirely  with  the  consent  of 
the  insolvent  and  the  defendants,  and  this  action  is  brought  to  recover  in 
respect  of  so  much  property  as  did  not  pass  by  the  deed  between  the  par- 
ties. The  point  was  reserved.  We  think  there  is  no  weight  in  the  objec- 
tion made  on  behalf  of  the  plaintiff.     If  the  insolvent  assented  to  the  act 

1  roLLocK,  C.  B.,  Parke,  B.,  Alderson,  B.,  and  Platt,  B. 


SECT.  I.]  FRANKLIN   BANK   V.    RAYMOND.  407 

being  done,  it  cannot  be  set  aside,  though  it  was  proved  that  there  was  a 
mistake  in  point  of  law,  or  a  mistake  in  point  of  fact :  it  is  his  doing,  and 
he  assented  to  it  when  it  was  done.  There  was  a  difference  of  opinion 
among  the  jury,  whether  or  not  he  was  under  a  notion  that  the  property- 
passed  by  the  deed  :  I  think  it  is  quite  immaterial  whether  he  entertained 
that  notion  or  not.  There  was  no  fraud.  When  a  person  does  by  some 
mistake  that  which  he  is  in  some  respects  bound  to  do,  and  perfectly  com- 
petent to  do,  that  cannot  be  treated  as  a  fraud  or  as  a  mistake.  If  a  man 
has  two  creditors,  and,  intending  to  pay  one  he  by  mistake  pays  the  other, 
he  cannot  get  the  money  back  again.  It  appears  to  me  and  all  the  mem- 
bers of  the  court,  that  there  ought  to  be  no  rule. 

Parke,  B.  I  have  consulted  my  Brother  Williams  on  the  matter,  and 
he  says,  the  consent  of  the  insolvent  to  the  sale  of  the  other  farm  was 
probably  influenced  by  the  supposition  on  his  part,  that  all  future-ac- 
quired property,  as  well  as  all  existing  chattels,  passed  by  the  first  as- 
signment; and  he  left  that  question  to  the  jury,  who  said  they  could  not 
decide  whether  he  made  that  assignment  under  the  influence  of  the  opinion 
that  he  was  bound  by  the  former  assent.  That  is  quite  immaterial :  he 
gave  his  consent  uninfluenced  by  any  fraud,  and  under  a  mistake  of  law ; 
therefore,  he  must  be  bound  by  that  mistake  of  law.  On  the  question  of 
the  issue,  I  think  the  verdict  was  right. 

Bnle  refused. 


FRANKLIN   BANK  v.   E.   &   H.   RAYMOND. 
In  the  Supreme  Court  of  Judicature  of  New  York,  August,  1829. 

\Rej)(yrted  in  3  Wendell,  69.] 

This  was  an  action  of  assumpsit,  tried  at  the  New  York  circuit,  in  June, 
1828,  before  the  Hon.  Ouden  Euwarus,  one  of  the  circuit  judges. 

The  declaration  was  on  a  promissory  note  for  $497.30,  dated  the  12th 
May,  1824,  made  by  J.  II.  Cunningham,  payable  in  00  days  to  E.  W.  A. 
Bailey,  and  indorsed  by  him  and  by  the  defendants,  who  wore  sued  as  sec- 
ond indorsers.  The  defendants  pleaded  the  general  issue,  and  gave  notice 
of  set-off. 

The  question  in  this  case  arose  on  the  defence  set  up.  Tiie  defendants 
proved  that  the  note  in  question  was  received  from  Bailey  in  exchange  for 
a  note  of  the  same  sum  and  date  made  by  the  defendants  to  Bailey.  That 
on  the  14th  June,  the  defendants  obtained  the  note  received  of  Bailey  to 
be  discounted  at  the  Franklin  Bank  to  tlieir  credit.  Subsequently  notice 
was  received  at  their  counting  room,  from  the  Franklin  Bank,  that  tiie  note 
given  by  them  to  Bailey  was  payable  on  the   13th  August;  on  which  day 


408  FRANKLIN   BANK   V.   KAYMOND.  [CIIAP.  II 

an  agent  of  the  defendants,  who  had  charge  of  their  business  (they  being 
absent  from  the  city),  sent  a  lad  to  the  bank  with  a  check  to  pay  the  note. 
The  lad  returned  with  the  note  marked  paid.  The  agent,  discovering  that 
it  was  not  indorsed  by  Bailey,  within  one  or  two  hours  afterwards  took  it 
to  the  bank,  offered  it  to  a  teller,  and  requested  him  to  return  the  check. 
He  was  told  that  the  note  belonged  to  the  Hoboken  Bank ;  that  it  had 
been  left  by  them  for  collection ;  that  the  amount  had  been  carried  to  their 
credit ;  and  that  the  payment  could  not  be  rescinded.  The  witness  stated 
to  the  officer  of  the  bank,  that  he  could  not  recognize  the  application  of  the 
check  to  the  unindorsed  note ;  that  the  defendants  had  unsettled  accounts 
with  Bailey,  were  under  responsibilities  for  him  independent  of  that  note, 
and  that  Bailey  had  died  insolvent.  The  conduct  of  the  agent  in  thus  re- 
pudiating the  application  of  the  check  to  the  piayment  of  the  note  given 
by  the  defendants  to  Bailey,  was  on  the  same  day  communicated  to  and 
approved  by  one  of  the  defendants.  The  note  taken  up  was  not  produced 
on  the  trial,  but  its  non-production  was  accounted  for  to  the  satisfaction 
of  the  judge.  The  defendants  proved  that  the  check  drawn  by  the  agent 
was  in  the  names  of  the  defendants,  on  funds  belonging  to  them  in  the 
Franklin  Bank,  and  that  the  same  was  charged  to  them.  They  further 
proved  that  Bailey  was  indebted  to  them  on  a  promissory  note,  in  the  sum 
of  $250,  bearing  date  the  17th  June,  1824,  payable  in  ninety  days;  and  in 
the  sum  of  $28.27,  being  a  book  account  of  the  date  of  the  1st  May,  1824; 
and  that  he  died  insolvent  before  the  maturity  of  the  note  lent  him. 

On  the  part  of  the  plaintiffs,  it  was  proved  that  the  note  taken  up  by 
the  defendants  was  discounted  before  due,  at  the  Hoboken  Bank,  for  the 
accommodation  of  Bailey,  who  received  the  avails ;  that  the  note  was  de- 
livered to  the  bank,  but  through  inadvertence  it  was  not  indorsed  by  Bailey. 
Some  time  after  the  note  was  discounted,  the  cashier  of  the  Hoboken  Bank 
discovered  that  it  was  not  indorsed,  and  sent  to  procure  Bailey's  indorse- 
ment ;  but  he  was  either  too  ill  to  do  it,  or  dead,  at  the  time  it  was  so  sent. 
The  note  was  deposited  in  the  Franklin  Bank  for  collection,  and  that  bank, 
upon  its  being  paid,  credited  the  Hoboken  Bank  with  the  amount. 

The  judge  charged  the  jury,  that  if  they  found  that  the  note  taken  up 
at  the  Franklin  Bank  with  the  check  of  the  defendants  was  made  for  the 
accommodation  of  Bailey,  and  given  in  exchange  for  the  note  declared  on 
in  this  case,  and  that  the  defendants  knew  that  Bailey's  intent  was  to  put 
the  same  into  circulation,  the  defendants  had  sufficient  notice  to  put  them 
upon  the  inquiry,  whether  Bailey  had  not  passed  away  their  note  ;  and 
that  a  delivery  of  the  note  by  Bailey  to  the  Hoboken  Bank,  and  his  receiv- 
ing the  amount  upon  discount  from  that  bank,  vested  in  that  bank  the 
right  to  the  money  paid  into  the  Franklin  Bank.  The  counsel  for  the 
defendants  excepted  to  the  charge.  The  jury  found  a  verdict  for  the  de- 
fendants. A  motion  was  now  made,  on  the  part  of  the  plaintiffs,  to  set 
the  same  aside. 


SECT.  l]  FRANKLIN  BANK  V.   RAYMOND.  409 

B.  Bogardm,  for  plaintifls. 

G.  Griffin,  foi-  defendants. 

By  the  Court,  Makcy,  J.  The  note  given  by  the  defendants  to  Bailey 
had  not  been  transferred  by  liim  according  to  the  custum  of  merchants. 
The  holders  of  it  could  not  therefore  maintain  an  action  upon  it  in  their 
name;  but  Bailey  had  assigned  it  without  indorsement,  for  a  valuable  con- 
sideration, to  the  Hobokon  Bank.  He  had  therefore  parted  with  all  his 
property  in  it,  and  tlie  bank  had  acquired  what  interest  he  possessed  in  it. 
The  holders  stood  in  the  relation  of  assignees  of  a  chose  in  action,  and  not 
indorsees,  and  held  the  note  subject  to  the  equities  existing  between  the 
original  parties.-'  While  thus  situated,  the  defendants,  under  tlie  belief 
that  Bailey  had  negotiated  the  note,  paid  it  to  the  assignees,  or,  which  is 
the  same  thing,  to  their  agents,  the  plaintiffs  in  this  suit.  After  payment, 
the  note  was  delivered  to  them,  and  they  then  discovered  that  it  had  not 
been  negotiated,  and  that  consequently,  in  the  hands  of  the  holders,  it  was 
subject  at  the  time  of  the  payment  to  a  set-off  to  the  full  amoimt  of  it. 
They  did  what  they  could  to  recall  the  payment.  They  of^ei'ed  to  restore 
the  note,  and  gave  immediate  notice  to  the  plaintiffs  that  they  should 
not  recognize  the  application  of  tlie  money  to  it.  If  the  payment  was 
recalled,  or  never  took  effect,  the  amount  paid  was  a  demand  that  ought 
to  be  set  off  in  this  action. 

It  is  said  the  defendants  had  a  right  to  apply  the  payment  to  the  demand 
for  which  this  suit  is  brought.  A  person  paying  money  has  undoubtedly 
a  right  to  apply  it  as  he  pleases;  but  if  he  does  not  give  express  direction, 
or  the  circumstances  are  not  such  as  to  imply  a  direction,  the  person  re- 
ceiving it  may  make  the  application.  In  this  case,  however,  the  money 
was  applied.  It  was  sent  to  the  bank  expressly  to  take  up  the  note  given 
by  the  defendants  to  Bailey,  and  for  that  purpose  it  was  received.  No 
question  can  properly  arise  as  to  the  right  of  making  the  application  by 
either  the  payees  or  the  rcceiveis. 

The  money  was  paid  by  the  defendants  in  ignorance  of  tlioir  rights. 
Does  this  circumstance,  connected  with  the  acts  of  the  defendants  to 
rescind  or  disaffirm  the  payment  when  tliey  found  the  note  had  not  been 
negotiated,  actually  rescind  the  payment,  and  leave  the  money  in  the  liands 
of  the  plaintiffs  to  be  set  off  in  this  action]  or,  to  state  tlie  question  iu 
other  words,  perhaps  more  clearly,  could  the  defendants,  after  disaffirming 
the  payment,  have  maintained  an  action  against  the  plaintiffs  for  the  money 
thus  paid?  The  general  principle  of  law  is  indisputalilo,  that  if  a  party 
pays  money  under  a  mistake  of  the  real  facts,  without  any  negligence  im- 
putable to  him  for  not  knowing  them,  ho  may  recover  back  such  money. 
What  sort  of  facts  are  meant?  Such  facts,  I  apprehend,  as  show  that  the 
demand  on  which  the  money  was  paid  did  not  actually  exist  against  the 
person  paying  at  the  time  the  money  was  paid.     The  cases  collected  by 

i  13  Miiss.  305. 


410  FKANKLIN   BANK   V.   RAYMOND.  [CHAP.  11. 

Comyn,^  and  those  referred  to  by  Saunders,  in  his  Treatise  on  Pleadings 
and  Evidence,  675,  are  of  this  character.  The  case  which,  in  my  opinion, 
goes  the  farthest  towards  sustaining  the  position  contended  for  by  the 
defendants,  is  that  of  Mihies  v.  Duncan.'^  A  bill  of  exchange  was  drawn  in 
Ireland,  on  a  stamp  less  in  amount  than  is  required  for  such  a  bill  drawn 
in  England ;  but  there  was  nothing  on  the  face  of  the  bill  to  show  where 
it  was  drawn.  The  acceptor  became  a  bankrupt,  and  the  holder  applied 
to  the  indorser  from  whom  he  received  it,  to  pay  ;  but  he  refused,  on  the 
ground  that  the  holder  had  not  given  notice,  and  had  made  it  his  own  by 
his  laches.  The  holder  then  threatened  to  sue  for  the  amount  he  had  paid 
the  indorser  for  the  bill,  on  the  ground  that  he  had  passed  to  him  a  void 
bill,  by  reason  of  its  not  having  the  stamp  required  for  a  bill  of  that  de- 
scription. Believing  that  such  was  the  fact,  the  indorser  paid  the  bill,  but 
he  soon  discovered  that  it  had  been  drawn  in  Ireland,  and  that  the  stamp 
was  sufficient,  and  brought  his  action  for  the  sum  he  had  paid,  and  recov- 
ered it.  In  that  case  it  was  clear  that  the  plaintift'  was  wholly  discharged 
from  all  liability  as  indorser  on  the  bill,  by  the  neglect  of  the  defendant  to 
give  him  notice  ;  and  that  the  money  was  paid  after  his  liability  had  in  fact 
ceased,  but  while  he  supposed  it  to  exist,  in  consequence  of  his  ignorance 
of  the  place  where  the  bill  was  drawn. 

The  case  before  us  is  not  only  different,  but  so  essentially  different  as 
to  exclude,  in  my  opinion,  the  application  of  the  principle  which  permits 
money  paid  in  ignorance  of  facts  to  be  recovered  back.  The  debt  paid  by 
the  defendants  was  one  that  subsisted  against  them  at  the  time  of  pay- 
ment. The  fact  of  which  they  were  ignorant  did  not  show  that  there  was 
no  debt  existing  at  the  time  ;  it  only  showed  that  they  were  in  a  situation 
which  enabled  them  to  set  off  against  the  demand  they  had  paid,  a  demand 
due  to  them  from  Bailey.  I  do  not  find  any  case  where  money  paid  on  a 
subsisting  demand  has  been  recovered  back  on  the  ground  that  the  person 
making  the  payment  has  subsequently  discovered  facts  that  show  he  had 
a  set-off  against  the  demand.  It  may  be  thought  that  this  note,  having 
been  transferred  without  indorsement,  was  open  to  be  impeached  in  the 
same  manner  as  if  it  had  remained  in  the  hands  of  Bailey ;  and  as  the  note 
which  Bailey  gave  for  it  had  not  been  paid,  it  was  void  for  want  of  consid- 
eration ;  and  therefore  there  was  not  in  fact  a  subsisting  debt  against  the 
defendants  at  the  time  the  money  was  paid.  The  facts  do  not  warrant  this 
position.  Cunningham's  note,  indorsed  by  Bailey,  was  a  good  considera- 
tion for  the  note  executed  by  the  defendants.  One  promise  is  a  sufficient 
consideration  for  another.  According  to  the  principles  laid  down  by  Lord 
Mansfield,  in  Price  v.  ISTeal,^  money  paid  by  mistake  or  ignorance  of  facts, 
can  never  be  recovered  unless  it  be  against  conscience  for  the  defendant  to 
retain  it.  The  operation  of  this  principle  destroys  the  defence  in  this  case ; 
for  it  will  scarcely  be  contended  that  it  is  against  conscience  for  the  Hobo- 
1  2  Comyn  on  Cont'   35,  41.  2  6  B.  &  C.  671.  ^  3  Buit.  135i. 


SECT.  I.]  BUEL   V.   BOUGHTOX.  411 

ken  Bank  to  retain  the  money.  The  defendants  gave  the  note  to  Bailey, 
not  doubting  that  he  would  negotiate  it ;  and  on  the  reasonaMe  supposi- 
tion that  he  had  done  so,  they  paid  it.  The  Huboken  Bank  paid  the 
amount  of  the  note  when  it  was  transferred  to  them  by  Bailey,  intending 
it  should  be,  and  believing  it  had  been  duly  negotiated  to  them.  By  mis- 
take it  was  not,  and  by  ignorance  of  this  mistake  the  note  was  paid. 
It  was  by  a  mere  accident  that  the  defendants  were  in  a  situation  to  avail 
themselves  of  tlieir  set-ofF  at  the  time  the  note  became  due  ;  and  it  was 
because  ignorant  of  this  accident  that  they  failed  to  avail  themselves  of  this 
advantage.  To  retain  the  money  paid  under  these  circumstances  cannot 
be  against  conscience.  I  am  therefore  of  opinion  that  the  check  was  in 
fact  applied,  and  was  properly  applicable  to  the  note  given  by  the  de- 
fendants to  Bailey,  and  left  at  the  Franklin  Bank  for  collection,  and  is  not 
money  in  the  possession  of  the  bank  for  the  defendants'  use,  to  be  set  off 
against  the  demand  for  which  this  action  is  brought.  There  must  be, 
therefore,  a  new  trial.  iN^w  trial  granted. 


BUEL  V.   EOUGHTOK 
In  the  Supreme  Court  of  New  York,  January,  1846. 

[Reported  in  2  Denio,  91.] 

Error  to  the  Onondaga  C.  P.  Buel  sued  Boughton  for  money  had  and 
received  to  his  use ;  and  the  case  was  substantially  as  follows  :  One  Char- 
lotte Smith  held  a  bond  against  the  plaintiff  for  $2G50,  payable  in  six  equal 
annual  instalments,  with  annual  interest  from  April  1,  1843.  James  H. 
Fuller,  in  right  of  his  wife,  owned  and  had  an  interest  in  the  bond  to  the 
amount  of  8-198.10.  On  the  first  day  of  April,  1843,  the  plaintiff  gave 
James  H.  Fuller  his  negotiable  promissorj'  note  for  said  sum  of  $498.10, 
having  more  than  two  years  to  run.  The  plaintiff  agreed  to  make  the  note 
payal)le  with  interest ;  but  interest  was  left  out  of  the  note  by  mistake  in 
drawing  it.  On  the  day  of  the  date  of  the  note  Charlotte  Smith  indorsed 
and  receipted  the  amount  of  the  note  on  the  bond.  On  the  day  tlio  note 
was  given,  James  II.  Fuller  transferred  it  to  Almcrin  Fuller,  wlio  indorsed 
the  amount  of  the  note  on  a  bond  which  lie  held  against  James,  whicl; 
bond  was  on  interest.  This  was  done  on  the  supposition  that  the  note  was 
also  on  interest.  About  twenty  days  afterwards  Almcrin  Fuller  transferred 
the  note  to  the  defendant,  who  indorsed  the  amount  of  the  note,  and  of 
the  interest  which  was  supposed  to  have  then  accrued  upon  it,  on  a  bond 
which  he  held  against  Ahnerin  Fuller,  which  bond  was  on  interest.  On 
the  23d  of  May,  1845,  the  plaintiff  paid  the  note  to  the  defendant,  and  by 
mistake,  supposing  the  note  to  have  been  written  with  interest,  paid  tho 
defendant  $71.20  for  interest  on  the  note,  and  took  it  up.     The  plaintiflf 


412  BUEL   V.    BOUGHTON.  [CHAP.  II. 

brou'^ht  this  suit  to  recover  back  the  sum  so  paid  by  mistake  for  interest. 
The  defendant  set  up  the  other  facts  which  have  been  mentioned  as  an 
answer  to  the  action ;  and  the  court  decided  in  his  favor.  A  verdict  and 
judgment  having  passed  for  the  defendant,  the  plaintiff  now  brings  error 
on  a  bill  of  exceptions. 

G.  W.  Noxon,  for  the  plaintiff  in  error. 

Noxon,  Leavenworth  and  Comstoch,  for  the  defendant  in  error. 

By  the  Court,  Broxson,  C.  J.  This  is  a  remarkable  case.  The  plaintiff 
first  omitted,  by  mistake,  to  make  the  note  payable  with  interest,  as  he 
should  liave  done  ;  and  then,  by  another  mistake,  he  corrected  the  first 
error  by  paying  interest,  when  the  note  itself  imposed  no  such  obligation. 
And  thus  by  two  blunders  the  parties  have  come  out  right  at  last.  Or  at 
least,  the  plaintiff  has  paid  no  more  than  he  ought  to  pay ;  and  there 
would  be  no  ground  for  an  action  to  recover  back  the  money  paid  for  in- 
terest, if  the  payment  had  been  made  to  James  H.  Fuller,  the  payee  of  the 
note,  against  whom  the  first  mistake  was  made.  One  party  would  in  that 
case  have  paid,  and  the  other  received  just  what  in  justice  and  honesty 
ought  to  be  paid  and  received. 

But  the  payment  was  not  made  to  James  H.  Fuller  ;  and  this  leads  me 
to  notice  that  not  only  the  plaintiff  and  James  H.  Fuller  acted  from  be- 
ginning to  end  under  the  mistaken  supposition  that  the  note  was  made 
payable,  as  it  should  have  been,  with  interest;  but  the  note  was  twice 
transferred,  and  both  Almerin  Fuller  and  the  defendant  took  it  under  the 
same  mistake  of  supposing  it  carried  interest.  Now  as  against  the  plaintiff, 
James  H.  Fuller  had  an  equitable  claim  to  have  the  mistake  corrected,  so 
as  to  give  him  interest  on  the  debt.  Then  Almerin,  having  taken  and  paid 
James  for  the  note  as  though  it  were  on  interest,  had  an  equitable  claim 
to  have  the  mistake  corrected,  so  as  to  give  the  interest  to  him.  The  same 
thing  is  true  as  between  the  defendant  and  Almerin.  The  defendant  took 
and  paid  him  for  the  note  as  though  it  carried  interest.  And  thus  by  a 
series  of  mistakes  the  equitable  claim  to  interest  which  was  originally  in 
James,  passed  from  him  to  Almerin,  and  from  Almerin  to  the  defendant ;  so 
that,  at  the  time  the  money  was  paid,  the  defendant  was  the  person  who 
was  equitably  entitled  to  receive  it.  He  could  not  have  sued  the  plaintiff 
for  it  at  law  in  his  own  name  ;  but  in  a  court  of  equity  the  money  would 
have  been  awarded  to  him,  and  not  to  James  H.  Fuller.  It  has  come  into 
the  defendant's  hands  without  suit,  and  from  the  person  who  ought  to  pay 
it ;  and  I  see  no  sufficient  reason  for  requiring  it  to  be  refunded.  Whether 
the  defendant  could  sue  at  law  in  his  own  name  to  recover  the  money  ;  or 
whether,  having  fairly  got  it,  this  action  for  money  had  and  received  to 
the  plaintiffs  use  can  be  maintained,  are  very  different  questions.  This  is 
an  equitable  action,  which  may  be  defended  upon  the  same  equitable  prin- 
ciples as  those  upon  which  it  is  maintained.  As  a  general  rule,  the  ques- 
tion is,  to  which  party  ex  cequo  et  bono  does  the  money  belong;   and  in  this 


SECT.  I.]  nUBBAKD   V.   CITY   OF   HICKMAN.  413 

case,  I  tliiuk  it  belongs  to  the  defendant,  who  has  got  it.  Let  us  suppose 
that  tlie  plaintiff  had  refused  to  pay  the  interest  to  the  defendant ;  but, 
beuig  liable  to  pay  it  to  some  one,  he  had  paid  it,  either  voluntarily  or  by 
compulsion,  to  James  H.  Fuller,  between  whom  and  the  plaintiff  the  origi- 
nal mistake  was  made.  James  might  then  have  been  compelled  to  pay  the 
money  to  Almeriu  ;  and  Almerin  to  the  defendant.  Or  if  we  begin  at  the 
other  end,  the  defendant  might  have  fallen  back  upon  Almerin,  and  com- 
pelled him  to  correct  the  mistake  by  paying  the  interest ;  Almerin  could 
have  gone  back  in  like  manner  upon  James ;  and  James  upon  the  plaintiff. 
And  so  in  any  way  of  viewing  the  matter,  the  plaintiff  was  bound  in  equity 
and  good  conscience  to  pay  the  money ;  and  the  defendant  was  the  man 
who  in  equity  and  good  conscience  was  entitled  to  receive  it.  IJe  has  got 
it ;  and  to  allow  the  jdaintiff  to  recover  it  back,  would  be  to  make  this  the 
first  in  a  circuit  of  four  actions  which  would  end  in  leaving  the  money  just 
where  it  was  at  the  beginning. 

It  is  said  that  although  the  plaintiff  has  paid  the  interest  to  the  defend- 
ant, he  may  be  compelled  to  pay  it  again  in  an  action  on  his  bond  to  ]\[rs. 
Smith.  But  I  think  not.  It  fully  appears  that  the  principal  sum  of  money 
for  which  the  note  was  given  belonged  to  James  H.  Fuller ;  and  of  course 
he  was  entitled  to  the  interest  which  should  afterwards  accrue  on  that  sum. 
If  the  indorsement  made  on  the  plaintiff's  bond  would  not  of  itself  preclude 
Mrs.  Smith  from  recovering  the  interest  in  question,  it  would  clearly  be 
enough  to  show  in  addition,  that  the  plaintiff  had  corrected  the  error  by 
paying  the  interest.  But  if  the  plaintiff  should  succeed  in  recalling  the 
money,  then  undoubtedly  Mrs.  Smith,  on  proving  the  mistake  in  giving  the 
note,  and  that  the  plaintiff  had  not  corrected  it,  might  recover  this  interest 
for  the  benefit  of  James  H.  Fuller.  But  by  leaving  the  money  where  it  is, 
the  whole  series  of  mistakes  will  be  corrected,  and  all  parties,  unless  it  be 
the  plaintiff,  will  be  satisfied.  Judgment  affirmed. 


HUBBARD   V.    CITY   OF   HICKMAN. 
In  the  Court  of  Appeals  of  Kentucky,  October  9,  18G8. 

[Reported in  4  Bush,  204.] 

Randle  and  Tyler,  for  appellant. 

John  Rodman,  fur  appellee. 

Judge  li'oHERT.soN  delivered  the  opinion  of  the  court. 

The  aj)pellant  brouglit  this  action  a;_'aiMst  the  appi-llee  for  reclamation  of 
one  thousand  five  hundred  dollars  which,  tliroui,di  alleged  mistake  of  law, 
he  had,  for  ten  consecutive  years,  paid,  at  the  rate  of  one  hundred  and 
fifty  dollars  a  year,  under  an  assessment  by  the  municipality  of  hi.s  chosea 
in  action  fur  local  taxatiun. 


414  HUBBARD   V.   CITY   OF   HICKMAN.  [CHAP.  II. 

The  answer  insists  that  the  tax  was  legal,  —  avers  that  the  appellant,  all 
the  time,  was  a  municipal  officer,  approved  and  aided  in  the  enforcement 
of  the  like  taxation  on  others,  and  once  as  councilman  voted  to  impose 
it ;  and,  alleging  that  he  failed  to  list  at  least  eighty  thousand  dollars  of 
ckoses  in  action,  the  appellee  therefore  asserted  a  counter-claim  for  the  sur- 
plus improperly  pretermitted.  On  a  demun-er  to  the  answer,  the  circuit 
court,  reverting  to  the  petition,  adjudged  it  insufficient  and  dismissed  it. 

The  fourth  and  fifth  sections  of  the  act  of  1854,^  like  the  charter  of  the 
city  of  Lexington,  authorized  the  city  to  assess  "all  the  real  and  personal 
estate  of  the  city ; "  and,  in  the  case  of  Johnson  v.  The  City  of  Lexington,^ 
tliis  court  exonerated  Johnson  from  the  payment  of  a  municipal  tax  im- 
posed on  his  choses  in  action. 

That  case  and  this  differ  in  two  respects.  1st.  Johnson  resisted  pay- 
ment. The  appellant,  after  ten  years,  seeks  to  recover  back  what  he  vol- 
untarily paid.  2d.  The  charter  of  Lexington  did  not  contain  the  follow- 
ing provision  of  the  act  of  1854:  "In  making  assessment  for  the  rail- 
road tax,  all  property  taxed  shall  be  given  in  under  the  same  rules  and 
regulations  required  in  giving  in  taxable  property  for  State  revenue." 

Whether  this  supplement  was  intended  to  adopt  the  equalization  law  of 
the  State,  or  meant  only  to  fix  the  mode  of  listing  "  real  and  personal  es- 
tate," is  a  rather  vexatious  question,  which  we  will  not  decide  in  this  case, 
as  we  would  be  compelled  to  do  had  not  the  appellant  paid  the  tax  as  and 
when  he  did.  Having  so  paid  it,  has  he  a  conscientious  claim  to  restitu- 
tion, so  far  as  not  barred  by  limitation  ]  And  is  there  any  implied  promise 
to  pay  it  back  1     We  think  not. 

It  is  difficult  to  prove  a  mistake  of  law,  or  that  it  was  the  only  reason 
for  payment ;  and  it  is  neither  alleged  nor  sufficiently  proved  that  a  mis- 
take of  law  was  the  appellant's  only  motive  for  so  long  paying  the  tax. 
We  may  presume  other  and  higher  motives,  whatever  he  may  have  thought 
of  his  legal  obligations. 

But,  as  the  appellant  helped  to  impose  the  tax,  and  otherwise  ratified  it, 
he  was  under  an  honorary  obligation  to  his  fellow-citizens,  who,  therefore, 
paid  their  portions  of  it,  to  contribute  his  share  of  the  self-imposed  burthen. 

A  payment  of  a  debt  barred  by  limitation  can  never  be  recovered  back 
on  a  plea  of  mistake  of  law  or  of  fact. 

There  was  an  honorary  obligation  to  pay,  and  the  law  would  rather 
presiune  that,  therefore,  payment  would  have  been  made  had  there  been  no 
mistake  as  to  the  bar.  So  here,  and  especially  as  the  appellant  paid  only 
what  he  induced  others  to  pay,  whom  therefore  it  was  his  duty  to  help, 
and  also  as  the  payment  relieved  other  property  of  increased  taxation. 

We  are  therefore  of  opinion  that  the  law,  on  the  facts  exhibited,  does 
not  mipiy  a  promise  of  restitution,  and  the  judgment  is  therefore  affirmed. 

i  Session  Acts,  p.  66L  2  14  b.  Mon.  648.  , 


SECT.  I.]  JACKSON  V.   McKNIGHT.  415 


ISAAC  JACKSON,   Eespoxdekt,  v.  HORACE  F.   McKXIGHT, 

Appellant. 

In  the  Supreme  Court  of  New  York,  January  Term,  1879. 

[Repotted  in  17  Uun,  2.] 

Appeal  from  a  judgment  iu  favor  of  the  pluiiitift',  entered  upon  the  report 
of  a  referee. 

The  action  was  brought  to  recover  money  alleged  to  have  been  paid  to 
the  defendant  under  a  mistake  of  fact. 

John  B.  WMalley  for  the  appellant. 

James  C.  Miller  for  the  respondent. 

Learned,  P.  J,  On  the  23d  of  March,  1875,  the  defendant  was  the  as- 
signee and  owner  of  a  bond  and  mortgage  executed  by  the  plaintiff,  which 
had  become  payable  several  years  before.  The  interest  had  been  payable 
annually  on  the  tenth  of  September,  and  it  had  iu  fjtct  been  paid  up  to 
September  10,  1874.  On  the  day  first  mentioned,  the  defendant  stated  to 
the  plaintiff  that  $230  of  interest,  payable  September  10,  1874,  were  un- 
paid, and  the  plaintiff  thereupon  paid  the  defendant  S230  for  such  interest, 
not  remembering,  at  the  time,  that  the  interest  had  been  paid  to  that  date. 
In  January,  187G,  the  defendant  assigned  the  bond  and  mortgage.  After  a 
lapse  of  two  years  the  plaintiff  sued  to  recover  back  this  money  as  overpaid 
by  mistake. 

The  difficulty  is  that,  at  the  time  when  the  plaintiff  made  this  payment, 
he  was  owing  the  defendant  a  much  larger  amount,  overdue  and  payable 
on  the  very  obligation  upon  which  this  payment  was  made.  Clearly,  if 
the  plaintiff  had  handed  the  defendant  §230  to  apply  on  the  bond  and 
mortgage,  he  could  not  have  recovered  that  sum  back.  But  in  this  present 
case  he  claims  to  recover,  because  it  was  intended  as  a  payment  of  interest 
which  had,  in  fact,  been  paid  ;  and  n(jt  as  a  payment  of  principal,  which 
had  not.  The  payment,  however,  was  really  made  on  the  debt.  The 
plaintiff  is,  and  always  will  be,  entitled  to  a  credit  for  so  much  paid  thereon. 
The  defendant  and  the  defendant's  assignee  can  enforce  the  bond  and  mort- 
g-age  only  for  wliat  is  payable,  after  crediting  this  and  all  other  payniL'nts. 
In  fact,  over  six  months'  interest  had  accrued  at  the  time  when  this  money 
was  paid,  payment  of  which  (it  would  seem)  might  have  been  demanded, 
the  principal  being  overdue.  And  further,  after  this  money  was  paid  and 
before  the  suit  was  commenced,  even  liefore  the  defendant  assigneil  the 
bond  and  mortgage,  interest  accrued  on  the  bond  and  mortgage  more  than 
tiiis  amount.     How  any  subsequent  payments  were  made  is  not  shown. 

The  action  to  recover  money  paid  by  mistake  is  sustained,  because  other- 
wise the  party  would  suffer  an  unjust  loss.     It  should  not  bo  extended  to 


.416  FilEEMAN   V.    JEFFRIES.  [CIIAP.  II. 

cases  where  the  relief  is  not  necessary.  It  is  not  necessary  in  the  present 
case,  because  the  plaintiff  can  protect  himself  whenever  lie  is  sued  on  tne 
bond  and  mortgage.  Perhaps,  in  such  suit,  the  holder  of  the  mortgage 
may  voluntarily  give  the  plaintiff  the  credit  to  which  he  is  entitled  for  this 
payment.  Any  questions  between  the  defendant  and  his  assignee,  as  to 
the  defendant's  liability  on  the  assignment,  they  must  settle  among 
themselves. 

The  judgment  should  be  reversed,  a  new  trial  granted,  the  reference 
discharged,  costs  to  abide  the  event. 

Present  —  Learned,  P.  J.,  Boardman  and  Bockes,  J  J. 

Judgment  reversed,  new  trial  granted,  reference  discharged,  costs  to  abide 
event. 


(h.)     When  a  Demand  is  necessary/. 

FREEMAX  V.   JEFFRIES. 
In  the  Exchequer,  May  G,  1869. 
[Reported  in  Law  Reports  i  Exchequer,  189.] 

Action  for  money  had  and  received.     Plea  :  Never  indebted.     Issue. 

The  plaintift'  being  about  to  become  tenant  of  a  farm  held  by  the  defend- 
ant under  a  lease  which  would  expire  in  the  following  year,  the  plaintiff 
and  defendant  on  the  17th  of  July,  18G8,  entered  into  an  agreement  in 
the  following  terms  :  — 

"  First,  the  said  J.  S.  Jeffries,  by  and  with  the  consent  of  Sir  George 
Broke  Middleton  (the  landlord),  has  conveyed  and  assigned,  in  considera- 
tion of  the  sum  of  2000/.,  unto  the  said  T.  Freeman  all  his  interest  in  the 
farm  known  as  Alnesbourne  Priory,  etc.,  together  with  all  the  growing 
crops  as  now^  standing  upon  the  land,  or  as  already  harvested  and  secured, 
all  the  covenants  and  general  valuation  of  the  farm,  all  the  live  stock  con- 
sisting of  the  flock  of  black-faced  ewes,  twenty-five  scores,  not  more  than 
three  and  a  half  scores  to  be  crones,  and  sixteen  agricultural  horses,  also  all 
the  dead  stock  as  generally  used  upon  the  said  farm." 

Secondly,  the  defendant  was  to  harvest  the  crops,  pay  rent,  etc.,  till 
Michaelmas,  and  if  he  should  be  prevented  from  fulfilling  his  contract  was 
to  refund  the  2000Z.  already  paid,  with  interest.  "  It  is  further  agreed  be- 
tween the  said  J.  S.  Jeffries  and  the  said  T.  Freeman,  all  the  aforesaid  mat- 
ters and  things  are  to  become  a  subject  of  valuation  by  two  indifferent 
persons,  one  to  be  chosen  by  each  party,  and  in  the  event  of  their  not 
agreeing,  then  by  their  referee  or  umpire,  whose  decision  shall  be  final  and 
bindmg  on  both  parties.     It  is  further  agreed  between  the  aforesaid  par- 


SECT.  I.]  FREEMAN   V.   JEFFrjES.  417 

ties  that  after  the  valuation  is  made  and  the  award  prepared,  the  remainder 
of  the  money  shall  be  maJe  payable  to  tlie  said  J.  S.  Jeffries  on  the  1st 
day  of  November  next  by  note  of  hand." 

The  2000^.  was  paid  at  the  time  of  making  the  agreement  ;  the  valuers 
named  by  the  parties  completed  their  valuation,  which  was  handed  by  tho 
defendant  to  tho  plaintiff  on  the  21st  of  July;  and  with  the  vali:ation, 
which  was  for  a  lump  sum,  there  was  also  given  to  the  plaintiff  an  inven- 
tory of  the  items  valued.  On  the  23d  of  Juh'  the  plaintiff  and  defendant 
went  over  to  the  farm,  and  on  their  return  the  plaintitf  gave  the  defendant 
his  promissory  note,  payable  on  the  1st  of  November,  for  3319/.,  the  dif- 
ference between  5319/.  the  amount  of  the  valuation,  and  2000/.,  the  sum  paid 
down  on  signing  the  agreement. 

The  plaintiff  remained  in  possession  of  the  farm  till  the  following  Mich- 
aelmas, and  then  sold  his  interest  in  it  to  a  Mr.  Packard.  On  the  occasion 
of  the  sale  the  farm  was  revalued.  It  was  then  discovered  (as  the  plaintiff 
alleged)  that  several  items  had  been  included  in  the  valuation  to  him 
■which  ought  not  to  have  been  so  included ;  but  no  complaint  whatever  with 
respect  to  the  valuation  was  made  by  him  to  the  defendant  until  the  end  of 
October,  and  then  no  intimation  was  given  of  the  nature  of  the  grievance 
complained  of. 

On  the  1st  of  November  the  plaintiff  paid  the  amount  of  his  promissory 
note  to  the  defendant,  in  whose  possession  the  note  had  rem».incd  without 
being  negotiated,  and  in  December  commenced  this  action. 

At  the  trial  before  Bramwell,  B.,  at  the  Essex  spring  assizes,  18G9,  evi- 
dence was  given  to  the  effect  that  certain  items  had  been  improperly  in- 
cluded in  the  valuation  to  the  plaintiff.  These  items  were  of  two  sorts,  of 
each  of  which  certain  specimen  items  were  taken  as  representative.  The 
first  specimen  item  was  "groundage,"  an  allowance  made  in  some  districts 
by  the  custom  of  the  country  to  the  outgoing  tenant,  in  consideration  of 
his  not  feeding  or  turning  stock  on  to  land  sown  with  yoimg  seeds,  but 
which,  it  was  alleged,  was  not  allowed  by  the  custom  of  the  country  where 
the  farm  was  situated.  The  second  item  -was  "  pea  stubbles,  2r)rt.  3r.  33;>. 
tillage  and  seed  to  same  ; "  as  to  this  it  was  said  that  the  same  thing  was 
charged  twice  over,  once  as  tillage  and  seed,  and  afterwards  as  a  crop.  A 
verdict  was  taken  for  the  plaintiff,  with  leave  to  the  defcmlant  to  nu.vo  to 
enter  a  verdict  for  him,  the  aniomit  to  be  a-sccrtained  by  an  arbitrator,  in 
case  the  judgment  of  the  court  should  be  in  favor  of  the  plaintiff.  A  rule 
having  been  obtained  accordingly, 

J.  Brown,  Q.  C,  Sir  GfO)ye  Ifomjman,  Q.  C,  and  Finlai/  showed  cause. 

Jlau'kins,  Q.  C,  and  Philbnck,  in  support  of  the  rule,  were  not  called  upon. 

Kelly,  C.  B.,  after  stating  the  facts  of  the  case  and  the  terms  of  tho 
agreement,  proceeded  :  The  plaintiff  brings  this  action  to  recover  either  tho 
whole  sum  of  .0319/.,  or  the  2000/.  paid  on  deposit,  or  the  remaining  3319/., 
or  an  undefined  sum  which  the  jury  may  find  to  be  the  value  of  those  items 

?.l 


418  FKEEMAN   V.   JEFFRIES.  [CHAP.  II. 

winch  ought  not  to  have  been  included  in  the  valuation.  At  the  trial  va- 
rious items  vi'ere  specified  and  agreed  upon,  which  were  admitted,  or  which 
were  to  be  assumed,  to  represent  fairly  the  plaiutitf's  objections.  These 
items  are  of  two  kinds.  The  first  are  those  which,  by  the  custom  of  the 
country,  ought  not  to  be  included  in  the  valuation.  This  raises  the  ques- 
tion whether,  under  the  agreement,  power  was  not  given  to  the  valuers  to 
determine  what  the  custom  of  the  country  was,  and  to  apply  it  to  the  cir- 
cumstances. In  my  opinion  they  had  that  power.  If,  then,  we  were  to 
suppose  a  jury  satisfied  that  some  items  were  included  which  ought  by  the 
custom  to  have  been  excluded,  yet  the  plaintiff^  cannot  recover,  for  the 
question  was  left  to  the  determination  of  the  valuers,  whose  decision  was 
final. 

The  second  class  of  items  may  rest  on  a  different  principle.  Here  it  is 
said  the  valuation  contains  cumulative  charges,  one  for  a  crop,  and  another 
for  the  seed  from  which  it  was  raised.  It  may  even  here,  however,  be 
doubtful  whether  the  question  is  not  one  of  the  custom  of  the  country,  and 
one  therefore  falling  within  the  same  principle  as  the  first.  But,  assuming 
it  to  be  otherwise,  it  is  still  a  question  whether,  on  a  view  of  the  fields  and 
what  was  growing  there,  the  valuers  were  not  at  liberty  to  consider  whether 
both  stubble  and  seed  should  not  be  included  in  the  valuation.  Therefore, 
looking  at  the  nature  of  the  items,  and  admitting  that  there  may  have  been 
others  of  larger  amount  but  of  the  same  character,  it  is  not  competent  to 
the  plaintiff  to  object  to  the  valuation  ;  but  the  determination  of  the  valu- 
ers is  conclusive  against  him,  as  it  was  against  the  defendant.  On  these 
grounds  I  am  of  opinion  that  the  rule  must  be  made  absolute. 

But  I  must  add  that  if  the  case  were,  as  was  put  in  argument,  that  the 
valuers  had  manifestly  included  something  which  they  had  no  jurisdiction, 
right,  or  power  to  include,  as  fur  instance,  a  field  of  several  acres  with  a 
crop  of  wheat  upon  it  belonging  to  another  owner,  I  think  the  action  would 
still,  under  the  circumstances,  not  be  maintainable.  For  we  must  in  this 
action  consider  the  conduct  of  the  parties  before,  at  the  time  of,  and  after 
the  valuation,  the  acts  done  between  the  two,  and  the  acts  done  separately 
by  the  plaintiff  and  not  communicated  to  the  defendant.  Everything  goes 
on  regularly  till  the  21st  of  July,  when  the  defendant  produces  the  inven- 
tory and  valuation,  and  delivers  it  to  the  plaintiff",  who  accepts  and  receives 
it.  On  the  23d  the  parties  go  together  over  the  farm,  when  the  plaintiff 
might  have  compared  the  inventory  with  the  stock  and  crops,  and  seen 
whether  it  contained  anything  which  ought  not  to  have  been  included. 
But  he  did  not  do  so.  He  accepted  the  inventory  and  delivered  to  the  de- 
fendant the  promissory  note  for  the  amount  of  the  valuation  according  to 
their  agreement.  Now  if  a  question  had  then  been  raised  as  to  the  correct- 
ness of  the  valuation,  and  an  error  had  been  discovered,  steps  might  have 
been  taken  to  rectify  it  before  the  condition  of  the  parties  was  altered, 
Bat  the  plaintiff,  having  received  the  inventory,  and  with  full  means  of  in- 


SECT.  I.]  FREEMAN   r.    JEFFRIES.  419 

quiry,  offers  no  objection  and  makes  no  inquiry,  but  takes  possession  of  the 
farm,  stock,  and  crops.    Here  again  he  had  an  opportunity  of  going  through 
the  valuation  on  the  spot ;  but  he  does  not  do  so  ;  and  it  is  not  until  after 
he  has  paid  the  promissory  note  on  its  becoming  due  in  November,  that, 
having  previously,  and  on  the  occasion  of  his  selling  his  interest  in  the  farm, 
discovered,  as  he' alleges,  that  a  mistake  had  been  made  in  the  valuation,  ho 
commences  this  action.     Now,  suppose  a  mistake  had  been  made  in  fact, 
and  that  too,  of  an  important  kind,  such  as  that  a  field  not  belonging  to 
the  farm  had  been  included,  the  plaintiff's  duty  would  have  been  to  go  at 
once  to  the  defendant  and  claim  a  deduction,  and  (as  tlie  items  had  not  been 
separately  estimated)  that  the  valuers  should  revise  the  inventory  and  val- 
uation, and  determine  how  much  ought  to  be  allowed.     I  put  the  question 
to  Mr.  Brown  whether  the  valuers,  having  once  made  their  valuation,  wero 
fiincti  officio,  or  whether  it  was  still  open  to  them  to  make  a  new  valuation. 
He  agreed  that  if  the  valuation,  on  such  a  ground,  was  erroneous,  the  valu- 
ers would  be  entitled  to  make  a  new  valuation,  and  the  true  and  con-ect 
amount  being  thus  ascertained,  the  excess,  he  contended,  and  perhaps  with 
reason,  might  be  recovered  back.     This,  however,  was  not  done  in  fact. 
No  notice  was  given  to  the  defendant  or  to  the  valuers  of  any  alleged  error, 
nor  was  any  opportunity  afforded  him  or  them  of  examining  into  the  mat- 
ter.    On  the  contrary,  the  defendant  was  led  to  believe,  and  did  believe, 
that  the  valuation  delivered  was  a  correct,  final,  and  conclusive  estimate, 
and  he  received  no  notice  to  the  contrary  until  after  the  promissory  note 
had  been  paid,  and  it  was  impossible  to  reinstate  the  parties  in  their  pre- 
vious condition.     Clearly,  then,  the  plaintiff  cannot  recover  back  the  whole 
sum  of  5319/.  ;  nor  can  he  recover  the  2000/.  paid  on  deposit,  for  it  was 
paid,  not  under  the  valuation  at  all,  but  in  pursuance  of  the  agreement. 
Can  he  then,  thirdly,  recover  back  the  3319/.,  or  that  sum  whatever  it  was 
which  he  paid,  as  he  alleges,  under  a  mistake?     Certainly  he  cannot.     As- 
suming even  (though  without  conceding  it)  that  the  valuation  was  incor- 
rect and  void,  and  that,  if  the  money  had  not  been  paid,  an  action  against  the 
plaintiff  for  the  3319/.  must  have  failed,  yet  the  plaintiff  cannot,  under  the 
present  circumstances,  recover;  for,  in  the  first  place,  it  was  paid,  not  in 
consequence  of  the  valuation  alone,  nor  because  a  specific  sum  was  fixed  by 
the  valuation  ;  but  the  consideration  for  it  was  the  sale  and  delivery  of  tho 
farm,  stock,  and  crops,  which  having  been   in  fact  delivered  over  to  tho 
plaintiff  and  being  in  his  actual  possession,  no  such  fiulure  of  consideration 
has  taken  place  as  will  entitle  him  to  recover  tho  sum  paid,  as  if  a  mistake 
had  been  committed  applying  to  the  whole  matter.     This  is  an  c.putable 
action,  and  will  only  lie  when  it  is  inequitable  in   the  defendant  to  retain 
tho  money  which  the  plaintiff  claims  ;  but,  so  far  fro.n  that  being  the  cano 
here   it  would  be  most  ine.|uitable  to  allow  the  plaintiff  to  take  .t  away. 
The'plaintiff  was  bound  before  he  couM  call  on  the  defendant  to  repay  any 
money  at  all,  and  whilst  it  was  yet  practicable  to  correct  the  alleged  cin.r, 


420  FKEEMAN   V.    JEFFRIES.  [CHAP.  II. 

to  give  full  notice  of  it  to  the  defendant,  and  afford  him  the  opportunity  of 
investigating  the  claim  and  rectifying  the  valuation.  It  was  in  his  power 
to  do  so,  fur  he  was  still  in  possession  of  the  farm.  But  havmg  thus  the 
means  of  bringing  the  question  between  himself  and  the  defendant  to  a 
just  and  satisfactory  settlement,  he  gives  no  intimation  of  any  objection  to 
the  valuation,  allows  the  defendant  to  suppose  that  the  matter  is  concluded, 
and  then,  with  full  knowledge  of  all  the  circumstances  on  which  he  now 
founds  this  action,  he  parts  with  the  farm,  thus  rendering  it  impossible  fur 
the  valuers  or  the  defendant,  or  himself  even,  to  enter  the  farm  and  inspect 
the  stock  and  crops  for  the  purpose  of  reconsidering  the  valuation.  He 
pays  the  promissory  note,  still  without  objection,  and  finally,  and  without 
a  demand  made,  in  December  he  commences  this  action.'  It  is  therefore 
not  inequitable  for  the  defendant  to  retain  this  money,  for  he  has  received 
it  bona  fide  as  the  price  of  the  stock  and  crops  which  he  has  delivered  over 
to  the  plaintiff  according  to  his  agreement,  and  of  which  he  has  no  means 
of  repossessing  himself. 

It  appears  to  me,  therefore,  that  this  case  does  not  come  within  the  prin- 
ciple upon  which  the  action  for  money  had  and  received,  to  recover  money 
paid  by  mistake,  is  maintainable.  That  principle  is  clear  and  simple  in  the 
extreme.  Xo  man  should  by  law  be  deprived  of  his  money,  which  he  has 
parted  with  under  a  mistake,  and  where  it  is  against  justice  and  conscience 
that  the  receiver  should  retain  it.  If  A.  pay  money  to  B.,  supposing  him 
to  be  the  agent  of  C,  to  whom  he  owes  the  money,  and  B.  he  not  the 
agent,  it  may  be  recovered  back  again.  If  A.  and  B.  are  settling  an  ac- 
count, and  make  a  mistake  in  summing  up  the  items  —  A.  pays  B.  100^.  too 
much  —  he  may  recover  it  back  again.  So,  exempli  gratia,  in  one  of  the 
many  decided  cases  on  this  point,  where  an  attorney's  clerk  had  paid  a 
sheriff  10s.  Gd.  demanded  as  of  right  for  three  warrants,  believing  that  sum 
to  be  due.  and  id.  for  each  warrant  only  was  tlie  proper  sum,  the  attorney 
was  held  entitled  to  set  off  the  difference,  as  money  had  and  received  in  an 
action  brought  against  him  by  the  sheriff.  Dew  v.  Parsons.^  But  in  all  these 
cases,  not  only  was  the  money  paid  under  a  mistake  by  the  party  paying 
it;  but  the  retaining  of  the  money  by  the  receiver  was  against  equity,  jus- 
tice, and  good  conscience.  Here,  however,  there  was  no  mistake  on  the 
part  of  the  plaintiff.  He  paid  the  amount  at  which  the  valuers  had  in 
truth  and  in  fact  assessed  the  property  valued  :  and  the  mistake,  if  any, 
was  theirs,  and  he  and  not  the  defendant  had  the  means  of  enabling  them 
to  rectify  their  error.  On  the  other  hand,  not  only  was  it  not  against 
equity  and  good  conscience  in  the  defendant  to  retain  the  money,  at  least 
until  the  account  could  be  fairly  adjusted  between  him  and  the  plaintiff, 
but  it  would  have  been  manifestly  unrighteous  and  unjust  that  the  plain- 
tiff, having  received  possession  of  the  property  for  which  the  money  had 
been  paid,  having  sold  it  for  a  large  sum  of  money  which  he  had  also  re- 

1  2  B.  &  A.  562. 


SECT.  I.]  FREEMAN   V.   JEFFRIES.  421 

ceived,  and  thus  knowingly  deprived  himself  and  the  defendant  of  the 
means  of  rectifying  any  error  which  nii-ht  have  been  committed,  or  of  re- 
instating themselves  in  their  originul  condition,  should  be  permitted  by  law 
to  recover  back  the  money  he  had  so  paid,  tlius  taking  to  himself  at  once 
the  property  and  the  price  of  it,  and  leaving  the  defendant  to  his  legal 
remedy,  after  depriving  him  of  all  means  of  practically  enforcing  it 

Further,  it  appears  that  the  promissory  note  was  still  in  the  hands  of 
the  defendant  at  the  time  of  the  payment  of  the  money  by  the  plaiutiir  in 
November;  and  inasmuch  as  the  plaintiff  then  had  full  knowledge  of  all 
the  facts  of  which  he  alleges  that  he  was  ignorant  when  he  gave  the  prom- 
issor}'  note,  and  upon  his  ignorance  of  which  his  present  claim  is  founded,  I 
am  of  opinion  that  this  was  a  voluntary  payment  made  with  knowledge  of 
all  the  facts,  and  on  that  ground  also  the  money  cannot  be  recovered  back 
in  this  action. 

For  these  reasons  I  think  that  the  verdict  for  the  plaintiff  should  be  set 
aside,  and  the  rule  made  absolute  to  enter  the  verdict  for  the  defendant. 

Martin,  B.  I  also  think  this  rule  must  be  nu\de  absolute.  It  is  clear 
this  action  is  not  maintainable  without  a  demand,  that  is,  an  intimation 
from  the  plaintiff  to  the  defendant  that  the  money  which  has  been  paid 
■was  paid  under  such  circumstances  as  render  a  part  or  the  whole  recovera- 
ble back.  I  think  this  is  clear,  and  I  am  prepared  to  give  judgment  on 
this  point  alone.  The  action  is  at  common  law ;  and  I  only  know  of  two 
kinds  of  common-law  actions  ;  one  for  injury  to  person  or  property,  and 
the  other  for  breach  of  contract.  Now,  the  ordinary  case  of  breach  of  con- 
tract is,  where  both  parties  have  agreed  to  a  certain  thing,  and  one  breaks 
the  promise  which  he  has  made.  But  for  a  long  time  implied  contracts 
have  been  admitted  into  the  law,  where,  a  transaction  having  taken  place 
between  parties,  a  state  of  things  has  arisen  in  reference  to  it  which  was  not 
contemplated  by  them,  but  is  such  that  the  one  party  ought  in  justice  and 
f^iir  dealing  to  pay  a  sum  of  money  to  the  other.  Now,  a  state  of  circum- 
stances has  (it  must  be  assumed)  arisen  here  which  was  not  in  tlie  contem- 
plation of  either  party,  and  which  it  is  insisted  raises  an  impliLnl  contract 
in  the  defendant.  To  judge  wliether  this  is  so  we  must  look  at  tho  circum- 
stances. The  parties  have  entered  into  an  agreement  for  the  sale  of  tlie 
defendant's  interest  in  the  farm,  stock  and  crops,  for  an  entire  sum  to  be 
put  on  it  by  two  valuers,  and  of  which  2000/.  was  paid  down.  It  was  the 
duty  of  the  valuers  to  determine  what  was,  according  to  the  custom  of  the 
country,  to  be  paid  by  an  incoming  to  the  outgoing  tenant.  They  had  no 
difference  requiring  tiie  appointment  of  an  umpire,  but  make  an  asvard,  as 
to  which  it  is  ridictdous  to  8U[)pose  that  any  extravagant  or  ciuisiderablo 
error  hivs  been  committed  and  passed  over  by  the  phiintifl's  valuer  against 
the  interest  of  his  cmj)loyer.  A  promissory  note  is  j^iven  for  the  amoimt 
of  the  valuation  according  to  the  aj^rceinent,  and  is  jiaid  ;  tlu?  plaintiff 
enters  into  possession  of  the  farm ;  lie  again  sells  his  interest,  and  so  ceases 


^^"2  FREEMAN   V.   JEFFRIES.  [CHAP.  II. 

to  be  able  to  return  to  the  defendant  what  he  had  got  from  him ;  and  now, 
the  valuer  on  this  sale  having  discovered  what  he  thinks  to  be  a  mistake 
(and  what  we  must  suppose  to  be  such)  in  the  former  valuation,  the  plain- 
tiff without  notice  brings  an  action  against  the  defendant  to  recover  the 
whole  sum  which  he  has  paid  under  that  valuation.  We  are  asked  to  treat 
the  whole  affair  as  a  nullity,  and  are  told  that  this  is  the  essence  of  justice. 
But  the  effect  contended  for  could  only  be  produced  by  a  rescission  of  the 
contract,  and  the  contract  cannot  be  rescinded  unless  the  parties  can  be 
restored  to  their  original  condition.  But  if  one  party  has  done  an  act  by 
reason  of  which  it  has  become  impossible  to  put  the  other  in  the  same  sit- 
uation as  before,  there  can  be  no  rescission,  and  the  remedy,  if  any,  must  be 
on  the  contract.  It  is  contended  that  under  these  circumstances,  a  con- 
tract will  be  implied  to  return  the  money ;  but  I  am  not  of  that  opinion. 
If  an  action  lies  for  recovering  the  money  paid  for  those  items  which  ought 
not  to  have  been  included  in  the  valuation,  it  would  be  an  action  fur  the 
return  of  a  portion  of  the  money  paid,  on  the  ground  that  the  consideration 
had  failed,  and  after  notice  given  that  it  had  failed.  But  unless  some  com- 
munication has  been  made  by  the  plaintiff,  he  is  not  entitled  to  recover 
either  the  whole  or  any  part  of  this  sum.  On  the  ground,  therefore,  that 
the  plaintiff  is  not  in  a  position  to  sue  without  having  made  a  demand  on 
the  defendant,  I  am  of  opinion  that  this  rule  must  be  made  absolute. 

Bramwell,  B.  I  give  no  opinion  on  many  of  the  questions  which  have 
been  discussed;  but  on  the  ground  I  am  about  to  mention  I  think  this 
rule  must  be  made  absolute.  The  plaintiff's  case  is  this  :  "  I  have  paid 
money  which  I  was  not  bound  to  pay,  and  which,  if  I  had  known  facts 
which  I  now  know,  I  should  not  have  paid.  I  paid  it  on  the  footing  of  a 
valuation  having  been  made,  when,  in  fact,  no  valuation  had  been  made ; 
neither  a  valuation  including  in  distinct  items  the  matters  which  were  to 
be  valued,  nor  a  valuation  in  general  of  the  whole  of  the  items  for  which  I 
ought  to  pay."  But  if  the  plaintiff"  were  under  the  circumstances  entitled 
to  be  repaid  the  sum  he  claims,  he  ought  to  have  given  notice  to  the  de- 
fendant of  the  facts  by  reason  of  which  he  was  so  entitled ;  because  until 
he  did  so  there  could  be  no  duty  on  the  defendant  to  pay  it  over.  Put  the 
claim  of  this  action,  which  is  in  the  technical  form  of  an  action  for  money 
had  and  received,  in  a  rational  way,  and  it  amounts  to  this.  The  plaintiff 
says,  "  I,  in  the  belief  that  a  certain  valuation  had  been  made,  paid  certain 
moneys  to  you  ;  I  have  since  found  that  the  valuation  was  not  made,  I 
therefore  say  there  is  a  duty  on  your  part  to  repay  me."  Would  the  duty 
of  repayment  arise  until  this  notice  was  given  1  I  apprehend  not ;  for  at 
what  other  time  could  it  have  arisen?  ISTot  at  the  moment  when  the 
money  was  paid ;  for  it  was  paid  with  the  intention  that  the  defendant 
should  keep  it.  Was  it,  then,  at  the  moment  when  the  mistake  was  dis- 
covered"? This  would  be  most  unjust;  the  mistake  was  the  plaintiff's,  and 
the  discovery  is  the  plaintiff's,  and  the  defendant  may  still  think   that 


SECT.  I.]  FREEMAN   V.   JEFFRIES.  423 

eveiything  is  right,  and  that  no  mistake  at  all  was  committed.  Therefore, 
nntil  notice  no  duty  would  arise,  and  therefore  no  cause  of  action.  The 
argument  of  Sir  G.  Honyman  as  to  the  duty  of  knowledge  is  against  him  ; 
fur,  where  in  this  case,  is  the  duty  to  communicate  knowledge?  Clearly  in 
the  plaintiflf.  Let  me  suppose  the  case  that  the  plaintiff  had  brought 
against  the  defendant  an  action  of  trover  or  detinue  for  the  promissory 
note.  It  is  admitted  that  the  plaintiff  could  not  have  established  his  cause 
of  action  without  some  demand  ;  for  how  could  there  be  a  wrongful  deten- 
tion until  some  claim  was  made  1  If  this  is  so,  how  can  money  paid  be  de- 
manded back  by  an  action  without  previous  notice]  Suppose  1  hand  over 
money  to  some  one  to  take  care  of,  without  the  obligation  of  retaining  it 
in  specie  (and  I  do  not  include  circumstances  constituting  the  relation  of 
banker  and  customer),  I  must  give  notice  to  him  that  I  want  it  back  be- 
fore he  is  indebted  to  me,  or  is  under  any  present  duty  in  respect  of  it. 
It  is  contended  that  no  demand  is  necessary  where  there  is  already  a  cause 
of  action.  But  this  is  begging  the  question;  for  the  contention  on  the 
other  side  is,  that  there  can  be  no  cause  of  action  till  demand  ;  and  the 
case  of  Wilkinson  v.  Godefroy  ^  is  an  authority  in  favor  of  that  position. 
Therefore,  on  this  ground  alone,  without  saying  anything  of  other  grounds, 
the  plaintiff  cannot  succeed,  he  not  having  done  that  which  was  necessary 
to  entitle  him  to  maintain  an  action  for  money  had  and  received. 

PiGOTT,  B.  I  am  much  struck  with  the  observations  which  my  learned 
Brothers  have  made  as  to  the  necessity  of  a  demand  to  entitle  tlic  plaintiff 
to  maintain  the  action,  and  I  am  disposed  to  acquiesce  in  their  view  ;  but 
I  prefer  to  rest  my  judgment  on  the  nature  of  the  agreement  between  the 
parties.  This  valuation  was  in  substance  an  award  between  an  outgoing 
and  an  incoming  tenant,  and  the  subject-matter  of  it  is  all  the  defendant's 
interest  in  the  farm,  that  is,  everything  which  the  custom  of  the  country 
would  give  to  him  as  against  his  landlord.  Now,  if  we  look  at  the  trans- 
action with  reference  to  these  circumstances,  no  doubt  it  was  not  in  tiio 
contemplation  of  the  parties  tliat  the  plaintiff'  should  pay  for  what  he  did 
not  get ;  but  it  was  in  the  contemplation  of  the  parties  that  the  valuers 
should  determine  what  was  the  custom  of  the  country,  and  what  was  to  bo 
paid  according  to  it,  and  it  was  contemplated  that  there  might  be  differ- 
ences of  opinion,  and  even  some  errors  in  the  valuers.  But  it  was  not  con- 
templated that  for  some  slight  errors  the  whole  transaction  should  bo 
ripped  up  and  rescinded  ;  and  that  when  everything  was  swi-pt  away,  and 
tlie  whole  surface  of  the  farm  changed,  a  question  which  has  thus  becouio 
impossible  of  determination  should  be  transferred  from  an  examination 
under  favorable  circumstances,  and  by  a  convenient  tribunal,  to  a  triul  be- 
fore an  inconvenient  tribunal  and  under  most  unfavorable  circiimHtances. 
This  would  be  not  justice  but  a  great  wrong  to  the  defendant.  It  is  plain 
that  the  parties  intended  the  whole  m;itter  to  bo  left  to  tliO  valuers,  with 

J  9  Ad.  &  K.  5:5(5. 


424  SHARKEY  V.   MANSFIELD.  [CIIAP.  II. 

the  chance  of  such  error  as  they  might  make,  but  with  power  to  determine 

what  should  finally  be  due.     There  was,  therefore,  no  mistake  of  fact  in 

the  plaintiff,  who  paid  upon  a  valuation  which  was  actually  made,  but  the 

mistake  if  any  was  the  mistake  of  the  valuers. 

Rule  absolute. 


JAMES   SHAEKEY,    Appellant,   v.   LUTHER    E.   MANSFIELD, 

Respondent. 

In  the  Court  of  Appeals  of  New  York,  October  17,  1882. 

[Reported  in  90  New  York  Reports,  227.] 

Appeal  from  judgment  of  the  General  Term  of  the  city  court  of  Brooklyn, 
entered  upon  an  order  made  October  1,  1880,  which  affirmed  a  judgment  in 
favor  of  defendant,  and  affirmed  an  order  denying  a  motion  for  a  new  trial. 

This  action  was  brought  to  recover  a  balance  alleged  to  be  due  for  work 
and  material  in  building  a  stone  pier  in  the  Gowanus  canal. 

Plaintiff  claimed  that  the  work,  save  some  extra  work,  was  to  be  done  for 
a  gross  sum,  and  that  no  price  was  fixed  for  the  extra  work  ;  defendant 
claimed  the  agreement  to  be  that  the  work  should  be  paid  for  at  a  specified 
price  per  cubic  yard.  He  set  up  as  a  counter-claim  an  over-payment  made 
through  mistake  on  his  part  as  to  the  quantity  of  the  work  done,  which 
mistake  was  not  discovered  until  a  measurement  was  made  after  the  suit 
was  commenced,  which  was  in  1878.  Plaintiff  proved  that  his  bookkeeper 
presented  to  defendant  a  bill  for  the  work  as  claimed  by  him  in  1872,  and 
that  thereafter  defendant  made  payments  thereon. 

N'.  H.  Clement  for  appellant. 

Tracy,  Catlin  and  Hudson  for  respondent. 

Finch,  J.  This  is  not  a  case  of  money  paid  under  a  mutual  mistake, 
where  the  action  of  each  party  was  equally  innocent.  The  mistake  was  that 
of  the  party  who  paid,  and  not  at  all  that  of  the  one  who  received  the 
amount  in  dispute.  The  plaintiff  was  employed  by  the  defendant  to  build 
a  stone  pier  in  the  Gowanus  canal.  The  precise  tei-ms  of  the  contract,  and 
the  amount  due  for  construction  were  sharply  litigated  on  the  trial ;  but 
the  verdict  of  the  jury  establishes  that  there  was  an  over-payment  mista- 
kenly made  by  the  defendant.  His  right  to  recover  back  is  resisted,  mainly 
upon  the  ground  that  notice  was  not  given  and  demand  made  of  the  over- 
payment, before  setting  up  the  coimtei'-claim.  Without  stopping  to  consider 
whether  the  same  rule  applies  to  a  defendant  pleading  an  over-payment  by 
way  of  counter-claim,  as  that  which  governs  a  plaintiff  suing  for  the  same 
cause,  and  assuming  the  law  to  be  identical  in  both  cases,  we  are  still  of 
opinion  that  a  demand  was  not  a  condition  precedent  to  the  defendant's 
right  of  action.     Two  cases  in  this  court  are  relied  upon  by  the  appellant. 


SECT.  l]  SIIAllKEY   V.   MANSFIELD.  425 

The  Mayor  v.  Erbeu  ;  *  Southwick  i-.  The  First  Natioual  Bank  of  Memphis.' 
In  the  first  of  these  cases  no  mistake  was  established,  and  that  fact  decided 
the  case.  The  yourt  added,  "  where  money  is  paid  under  mutual  mistake," 
demand,  or  at  luast  notice  of  the  error,  must  precede  a  right  of  recovery. 
In  the  later  case,  the  mistake  was  mutual,  and  stress  wjxs  laid  upon  the 
fact  that  the  defendant  "lawfully  and  innocently  received  the  draft  and  the 
money  thereon."  The  ground  of  these  decisions  is  quite  obvious.  Where 
the  mistake  is  mut>ial,  both  parties  arc  innocent,  and  neither  is  in  the  wrong. 
The  party  honestly  receiving  the  money  through  a  common  mistake  owes  no 
duty  to  return  it  until  at  least  informed  of  the  error.  It  is  just  that  he 
should  have  an  opportunity  to  con-ect  the  mistake,  innocently  committed  on 
both  sides,  before  being  subjected  to  the  risks  and  expenses  of  a  litigation. 
It  was  said  in  Abbott  v.  Draper,^  that  "  when  a  man  has  paid  money  as  due 
upon  contract  to  another,  and  there  is  no  mistake,  and  no  fraud  or  other 
wrong  on  the  part  of  the  receiver,  there  is  no  principle  upon  which  it  can  be 
recovered  back  until  after  demand  has  been  made."  While  this  language 
is  not  accurate  as  to  a  mistake  on  the  part  of  the  receiver,  if  that  was  the 
meaning  intended,  the  doctrine  is  clearly  recognized  that  where  the  receiver 
is  guilty  of  fraud  or  other  wrong  in  taking  the  money,  he  is  not  entitled  to 
notice.  The  necessity  of  a  demand  does  not,  therefore,  exist  in  a  case 
where  the  party  receiving  the  money,  instead  of  acting  innocently  and  under 
an  honest  mistake,  knows  the  whole  truth,  and  consciously  receives  what 
does  not  belong  to  him,  taking  advantage  of  the  mistake  or  oversight  of  the 
other  party,  and  claiming  to  hold  the  money  thus  obtained  as  his  own.  In 
such  case  he  cannot  assume  the  attitude  of  bailee  or  trustee,  for  he  holds 
the  money  as  his  own,  and  his  duty  to  return  it  arises  at  the  instant  of  the 
wrongful  receipt  of  the  over-payment,  lie  is  already  in  the  wrong,  and  it 
needs  no  request  to  put  him  in  that  position.  The  Utica  Bank  v.  Van 
Gieson;*  Andrews  v.  Artisans'  Bank;'*  Dill  v.  Warehamj^  Southwick  v. 
First  National  Bank  of  Memphis.'' 

This  case  is  of  that  character.  The  receiver  was  not  innocent.  If  he  did 
not  perpetrate  a  fraud,  at  least  he  committed  a  wrong.  He  knew  all  the 
facts  and  must  be  assumed  to  have  known  the  law.  He  went  to  trial  not 
admitting  a  mistake,  but  insisting  that -there  was  none,  lie  charged  a 
price  bey'ond  tliat  to  which  ho  was  entitled,  or  for  quantities  which  were 
exaggerated,  and  obtained  the  money  through  the  inadvertence  and  mistake 
of  his  debtor,  who  had  not  measured  the  work.  He  did  not  come  rightfully 
by  the  excess.  He  took  it  as  liis  own  money,  conscious  of  all  the  facts,  and 
not  only  claimed  to  hold  it  as  such,  but  sued  to  recover  more.  The  case  is 
not  one  in  which  ho  owed  no  duty  until  apprised  of  his  mistake,  for  ho 
made  none.     He  took  what  was  not  his,  knowing  all  the  fads,  and  at  the 

1  3  Al.l..  Ai.j..  I)..c.  25r..  2  R4  N.  Y.  420,  supra.  »  4  Den.  fi3. 

i    18  Jolms.  485.  »  2-5  N.  Y.  2W.  «  ^  Met.  447. 

7  84  N.  Y.  430. 


426  STURGIS   V.    PRESTON.  [CHAP.  IL 

moment,  of  its  receipt  it  was  his  duty  to  return  it.  The  actiou  for  money 
had  and  received  could  be  at  once  maintained. 

The  appellant  further  relies  upon  the  facts  of  the  presentation  of  his  bill 
and  a  payment  thereafter,  made  by  the  defendant,  and  also  upmi  the  lapse 
of  time  during  which  the  bill  remained  unchallenged.  These  circumstances 
he  insists  amounted  to  an  admission  of  the  correctness  of  the  biU.  They 
tended  to  that  result,  but  were  not  conclusive.  They  were  met  by  tlie  de- 
fendant's evidence  of  mistake  and  his  explanation  consistently  therewith. 
The  facts  relied  on  and  the  explanation  given  were  submitted  to  the  jury 
and  they  have  determined  the  question.  We  discover  no  just  ground  for- 
reversing  the  recovery. 

The  judgment  should  be  affirmed,  with  costs. 

All  concur,  except  Tracy,  J.,  taking  no  part. 

Judgment  affirmed. 


JOHN   H.   STURGIS  v.   JONATHAN   PRESTON. 
In  the  Supreme  Judicial  Court  of  Massachusetts,  March  1,  1883. 

[Reported  in  134  ^fassachusetts  Reports,  372.] 

CoLBURN,  J.  In  this  case,  the  plaintiff  contended,  and  offered  to  prove 
that  in  the  year  1871  he  bargained  with  the  defendant  for  a  lot  of  land,  for 
a  certain  sum  a  square  foot ;  that  the  defendant  stated  the  number  of 
square  feet  in  the  lot ;  that  the  plaintiff  relied  wholly  upon  the  defendant's 
statement,  and  had  no  reason  to  believe  or  suspect  that  there  was  any  error 
in  said  statement ;  that  he  thereupon  paid  for  the  land  accordingly,  and 
took  a  deed  thereof;  that  there  was  not  the  number  of  square  feet  of  land 
in  said  lot  that  the  defendant  had  represented;  that  he  did  not  discover 
the  deficiency  until  the  year  1880,  a  short  time  before  this  action  was 
brought,  when  he  was  preparing  to  build  upon  the  lot ;  that  immediately 
upon  the  discovery  of  the  mistake,  he  notified  the  defendant  thereof,  and 
demanded  repayment  of  the  sum  so  overpaid,  and  brought  this  action  to 
recover  it.  The  plaintiff  disclaimed  all  charges  of  fraud  or  fraudulent  con- 
cealment on  the  part  of  the  defendant. 

One  of  the  counts  in  the  plaintiff's  declaration  was  for  money  had  and 
received.  The  defendant  relied,  as  one  defence  to  the  action,  upon  the 
statute  of  limitations. 

The  plaintiff  contended  that  an  action  for  money  had  and  received  has 
always  been  treated,  at  common  law,  as  being  founded  on  equity,  and  that 
the  decision  in  this  case,  whatever  it  ought  to  be,  should  be  the  same, 
whether  it  should  be  considered  a  decision  at  common  law  or  in  eqtiity  ; 
and  argued  that,  as  in  equity,  in  cases  of  mistake,  the  statute  of  limitations 


SECT.  I.]  STURGIS   V.   PRESTON.  427 

does  not  begin  to  run  until  the  discovery  of  the  mistake,  this  action  is  not 
barred  by  that  statute. 

The  answer  to  this  argument  is,  that,  although  an  action  for  money  had 
and  received,  in  its  spirit  and  object,  resembles  a  suit  in  equity,  it  is  still 
an  action  at  law,  within  the  statute  of  limitations;  and,  as  all  charges  of 
fraudulent  concealment  are  disclaimed,  it  is  not  within  any  exception  to 
the  statute.^ 

The  Commissioners  on  the  Ilevised  Statutes,  in  their  note  on  c.  120,  §  1 1, 
say  :  "  In  many  cases  of  implied  assumpsits,  and  other  suits  on  contracts, 
the  cause  of  action  may  remain  for  a  long  time  unknown  to  the  plaintiff; 
but  unless  that  knowledge  was  fraudulently  concealed  from  him,  it  was 
never  supposed  that  he  could  bring  his  action  after  the  expiration  of  six 
years."  See  also  Adams  v.  Ipswich  ;*  Bishop  v.  Little  ;'  Bree  v.  Holbech  ;* 
Banning  on  Limitations  of  Actions,  21.  Indeed,  under  the  facts  in  the 
case  at  bar,  it  would  seem  that,  even  in  a  suit  in  equity,  the  plaintift''s 
claim  would  be  barred ;  Farnam  v.  Brooks ;  ^  but  we  have  no  occasion  to 
decide  this  point. 

The  plaintiff  further  contended  that  his  right  of  action  did  not  arise  until 
after  demand,  which  was  not  made  until  1880,  and  that,  for  this  reason, 
this  action  is  not  barred  by  the  statute  of  limitations. 

We  are  of  opinion  that  the  plaintiff's  cause  of  action  arose  immediately 
upon  the  payment  of  the  money,  and  that  no  demand  was  necessary.  If 
the  plaintiff  should  sustain  his  offer  of  proof,  the  defendant  held,  and 
claimed  as  his  own,  from  the  moment  it  was  paid  to  him,  money  which  in 
equity  and  good  conscience  he  ought  to  have  immediately  repaid  to  the 
plaintiff.  Dill  v.  Waroham ;  ®  Earle  v.  Bickford  ; '  Utica  Bank  v.  Van  Gieson  ; * 
Hawley  v.  Sage.' 

This  case  differs  widely  from  those  in  which  the  defendant  is  in  the  right- 
ful possession  of  monc}',  making  no  claim  to  it  as  his  own,  but  ready  to 
pay  it  over  to  the  rightful  owner ;  in  which  it  is  held  that  no  right  of 
action  arises,  and  that  the  statute  docs  not  begin  to  run  until  after  a 
demand  upon  him  by  the  party  entitled  to  the  money,  and  a  refusal  to 
pay   it   over   to    the    rightful    claimant.      French    i'.    Merrill  ;  *°   Jones  v. 

McDermott." 

Judijment  for  the  Jtj\iul<int. 

J.  P.  Treadwell,  for  tho  j)laiutiff. 

T.  P.  Proctor  {E.  Tajipan  with  him)  for  tho  defendant. 

1  Gen.  Sts.  c.  155,  §§  ],  12.  «  no  jjiiss.  570.  »  3  Cncnl.  405. 

*  Doug.  630.  "  9  Pick.  212,  2 -J  5.  •  7  Mi-t.  438. 

7  6  Allen,  540.  *  18  Johns.  485.  »  15  Conn.  52. 

!•  132  Mass.  525.  "  IH  Mass.  400. 


423  KELLY  V.   SOLAKL  [CHAP.  IL 


(^.)   Plaintiff's  Negligence  no  Bar  to  a  Recovery. 

KELLY  V.   SOLARL 

In  the  Exchequer,  November  18,  184L 

[Reported  in  9  Meeson  ^  Welshy,  54.] 

Assumpsit  for  money  paid,  money  bad  and  received,  and  on  an  account 
stated.  Plea,  nan  assumpsit.  At  the  trial  before  Lord  Abinger,  C.  B.,  at 
tbe  London  sittings  after  Trinity  term,  it  appeared  that  this  was  an  action 
brought  by  the  plaintiff,  as  one  of  the  directors  of  the  Argus  Life  Assurance 
Company,  to  recover  from  the  defendant,  Madame  Solari,  the  sum  of  197/. 
10s.  alleged  to  have  been  paid  to  her  by  the  company  under  a  mistake  of 
fact,  under  the  following  circumstances. 

Mr.  Angelo  Solari,  the  late  husband  of  the  defendant,  in  the  year  1836 
effected  a  policy  on  his  life  with  the  Argus  Assurance  Company  for  £200. 
He  died  on  the  18th  of  October,  1840,  leaving  the  defendant  his  executrix, 
not  having  (by  mistake)  paid  the  quarterly  premium  ou  the  policy,  which 
became  due  on  the  3d  of  September  preceding.  In  November,  the  actuary 
of  the  office  informed  two  of  tl»e  directors,  Mr.  Bates  and  Mr.  Clift,  that 
the  policy  had  lapsed  by  reason  of  the  non-payment  of  the  premium,  and 
Mr.  Clift  thereupon  wrote  on  the  policy,  in  pencil,  the  word  "lapsed."  On 
the  6th  of  February,  1841,  the  defendant  proved  her  husband's  will;  and 
on  the  13th,  applied  at  the  Argus  office  for  the  payment  of  the  sum  of 
£1000,  secured  upon  the  policy  in  questiou  and  two  others.  Messrs.  Bates 
and  Clift,  and  a  tliird  director,  accordingly  drew  a  cheque  for  987/.  10s., 
which  they  handed  to  the  defendant's  agent,  the  discount  being  deducted 
in  consideration  of  the  payment  being  made  three  months  earlier  than  by 
the  rules  of  the  office  it  was  payable.  Messrs.  Bates  and  Clift  stated  in 
evidence,  that  they  had,  at  the  time  of  so  paying  the  money,  entirely  for- 
gotten that  the  policy  in  question  had  lapsed.  Under  these  circumstances, 
the  Lord  Chief  Baron  expressed  his  opinion,  that  if  the  directors  had  had 
knowledge,  or  the  means  of  knowledge,  of  the  policy  having  lapsed,  the 
plaintiff  could  not  recover,  and  that  their  afterwards  forgetting  it  would 
make  no  difference ;  and  he  accordingly  directed  a  nonsuit,  reserving  leave 
to  the  plaintiff  to  move  to  enter  a  verdict  for  him  for  the  amount  claimed. 

Tkesiger,  in  the  former  part  of  this  term,  obtained  a  rule  nisi  accordingly, 
or  for  a  new  trial ;  against  which, 

Piatt  and  Butt  now  showed  cause. 

Thesiger  and  Whateley,  contra. 

Lord  Abinger,  C.  B.  I  think  the  defendant  ought  to  have  had  the  op- 
portunity of  taking  the  opinion  of  the  jury  on  the  question  whether  in  reality 


SECT.  I.]  KELLY    V.    SOLAKL  429 

the  directors  liad  a  knowledge  of  the  facts,  and  therefore  that  there  should 
be  a  new  trial,  and  not  a  verdict  for  the  plaintiff;  although  I  am  now  pre- 
pared to  say  that  I  laid  down  the  rule  too  broadly  at  the  trial,  as  to  the 
effect  of  their  having  had  means  of  knowledge.  That  is  a  very  va'nie 
expression,  and  it  is  difficult  to  say  with  precision  what  it  amounts  to ;  for 
example,  it  may  be  that  the  party  may  have  the  means  of  knowledge  on  a 
particular  subject,  only  by  sending  to  and  obtaining  information  from  a 
correspondent  abroad.  In  the  case  of  Bilbie  v.  Lumley,  the  argument  as 
to  the  party  having  means,  of  knowledge  was  used  by  counsel,  and  adopted 
by  some  of  the  judges ;  but  that  was  a  peculiar  case,  and  there  can  be  no 
question  that  if  the  point  had  been  left  to  the  jury,  they  would  have  found 
that  the  plaintiff  had  actual  knowledge.  The  safest  rule  however  is,  that 
if  the  party  makes  the  payment  with  full  knowledge  of  the  facts,  although 
under  ignorance  of  the  law,  there  being  no  fraud  on  the  other  side,  he  can- 
not recover  it  back  again.  There  may  also  be  cases  in  which,  although  he 
might  by  investigation  learn  the  state  of  facts  more  accurately,  he  declines 
to  do  so,  and  chooses  to  pay  the  money  notwithstanding;  in  that  case  there 
can  be  no  doubt  that  he  is  equally  bound.  Then  there  is  a  third  case,  and 
the  most  difficult  one,  —  where  the  party  had  once  a  full  knowledge  of 
the  facts,  but  has  since  forgotten  them.  I  certainly  laid  down  the  rule  too 
widely  to  the  jury,  when  I  told  them  that  if  the  directors  once  knew  tho 
facts  they  must  be  taken  still  to  know  them,  and  could  not  recover  by 
saying  that  they  had  since  forgotten  them.  I  think  the  knowledge  of  tho 
fixcts  which  disentitles  the  party  from  recovering,  must  mean  a  knowledge 
existing  in  the  mind  at  the  time  of  payment.  I  have  little  doubt  in  this 
case  that  the  directors  had  forgotten  the  fact,  otherwise  I  do  not  believe 
they  would  have  brought  the  action ;  but  as  Mr.  Piatt  certainly  has  a  right 
to  have  that  question  submitted  to  the  jury,  there  must  be  a  new  trial. 

Pahke,  B.  I  entirely  agi-ce  in  the  o])inion  just  pnmounced  by  my  Lonl 
Chief  Barox,  that  there  ought  to  be  a  new  trial.  I  tliink  that  where  money 
is  paid  to  another  under  the  influence  of  a  mistake,  that  is,  ujion  the  sup- 
position that  a  specific  fact  is  true,  which  would  entitle  tho  other  to  tlio 
money,  but  which  fact  is  untrue,  and  the  money  would  not  have  been  paid 
if  it  had  been  known  to  the  payer  that  the  fact  was  tmtriie,  an  action  will 
lie  to  recover  it  back,  and  it  is  against  conscience  to  retain  it ;  though  a 
demand  may  be  necessary  in  those  cases  in  which  the  p-arty  receiving  may 
have  been  ignorant  of  the  mistake.  The  position  that  a  person  so  paying  is 
precluded  from  recovering  by  laches,  in  not  availing  himself  of  the  means  of 
knowledge  in  his  power,  seems,  from  the  cases  cited,  to  have  been  founded 
on  the  dictum  of  Mr.  Justice  Bayi.ev,  in  the  case  of  Milnes  v.  Duncan ;  and 
with  all  respect  to  that  authority,  I  do  not  think  it  can  be  sustained  in  point 
of  law.  If,  indood,  the  money  is  intcntidually  paid,  without  refc^-renco  to 
the  truth  or  falsehood  of  the  fact,  the  jtlaiutiff  meaning  to  waive  all  inquiry 
into  it,  and  that  the  person  receiving  shall  have  tho  money  at  all  events, 


430  APPLETON    BANK   V.    McGILVKAY.  [CHAP.  II. 

whether  the  fact  be  true  or  false,  the  latter  is  certainly  entitled  to  retain 
it ;  but  if  it  is  paid  under  the  impression  of  the  truth  of  a  fact  which  is 
untrue,  it  may,  generally  speaking,  be  recovered  back,  however  careless  the 
party  paying  may  have  been,  in  omitting  to  use  due  diligence  to  inquire  into 
the  fact.  In  such  a  case  the  receiver  was  not  entitled  to  it,  nor  intended 
to  have  it. 

GuRNEY,  B.,  concurred. 

RoLFE,  B.     I  am  of  the  same  opinion.     With  respect  to  the  argument, 

that  money  cannot  be  recovered  back  except  where  it  is  unconscientious  to 

retain  it,  it  seems  to  me,  that  wherever  it  is  paid  under  a  mistake  of  fact, 

and  the  party  would  not  have  paid  it  if  the  fact  had  been  known  to  him, 

it  cannot  be  otherwise  than  unconscientious  to  retain  it.     But  I  agree  that 

Mr.  riatt  has  a  right  to  go  to  the  jury  again,  upon  two  grounds :  first,  that 

the  jury  may  possibly  find  that  the  directors  had  not  in  truth  forgotten 

the  fact ;  and  secondly,  they  may  also  come  to  the  conclusion,  that  they 

had  determined  that  they  would  not  expose  the  office  to  unpopularity,  and 

would  therefore  pay  the  money  at  all  events ;  in  which  case  I  quite  agree 

that  they  could  not  recover  it  back. 

Hule  absolute  for  a  new  trial. 


PRESIDENT,   DIRECTORS   and   COMPANY  of  the  APPLETON 
BANK   V.  DAVID    F.    McGILVRAY   and   Others. 

In  the  Supreme  Judicial  Court  of  Massachusetts,  October  Term,  1855. 

[Reported  in  4  Gra;/,  518.] 

Action  of  contract  to  recover  $370.42,  received  by  the  defendants  to 
the  plaintiffs'  use. 

At  the  trial  before  Bigelow,  J.,  the  plaintiffs,  to  prove  their  case,  called 
a  witness,  who  testified  that  he  had  been  an  expressman  between  Boston 
and  Lowell  for  eleven  years,  and  that  was  his  whole  business ;  that  some- 
time previous  to  April  7,  1854,  he  received  for  collection  from  the  defend- 
ants, a  partnership  doing  business  in  Boston,  two  notes  of  J.  C.  Hildreth  & 
Co.,  a  partnership  doing  business  in  Lowell,  for  $370.42  each,  the  one  due 
on  the  7th  and  the  other  on  the  13th  of  April,  and  both  payable  to  the  de- 
fendants, and  indorsed  in  blank  by  them ;  and  was  directed  to  collect  them 
in  the  ordinary  way,  without  any  directions  as  to  protesting  them,  and 
gave  his  receipt  therefor ;  that  it  was  sometimes  his  custom  to  collect  notes 
by  depositing  them  in  a  bank,  and  sometimes  by  calling  on  the  parties 
personally,  though  he  did  not  communicate  to  the  defendants  how  he  was 
going  to  collect  their  notes,  and  did  not  know  that  they  knew  he  ever  col- 
lected notes  delivered  him  through  the  banks ;  that  before  the  7th  of  April 


SECT.  I.]  APPLETOX   BANK   V.   McGILVRAY.  431 

he  deposited  the  notes  with  the  plaintiffs,  a  bank  in  Lowell,  for  collection  ; 
that  on  the  8th  of  April  he  culled  on  the  plaintitls,  and  asked  if  the  note 
due  the  day  before  had  been  paid,  and  was  informed  by  a  clerk  of  the 
plaintiffs  that  it  had  been,  and  received  the  amount  of  it  from  the  plaintiffs  ; 
that  the  plaintiffs  received  no  compensation  for  collecting  these  notes,  and 
he  did  not  comnmnicate  to  the  plaintiffs,  when  he  left  the  notes,  to  whom 
they  belonged  ;  that  he  took  the  money  so  paid,  and  the  same  day  paid  it 
to  the  defendants,  but  did  not  remember  telling  the  defendants,  when  he 
paid  them  the  money,  that  he  collected  it  through  the  j)laintiti"s,  or  any 
bank ;   and  the  defendants  paid  him  for  his  services. 

The  plaintiffs  also  proved  that,  by  reason  of  the  notes  not  having  been 
placed  on  their  regular  file,  they  had  not  notified  Ilildrcth  «fe  Co.,  the 
promisors,  of  the  maturity  of  the  first  note,  and  their  clerk  was  led  into  the 
mistake  of  supposing  that  it  had  been  paid,  when  in  fact  it  had  not,  and 
has  never  been  paid  to  any  one ;  that  on  the  10th  of  April,  as  soon  as  the 
mistake  was  discovered,  the  plaintiffs  demanded  payment  of  the  promisors, 
who  refused,  and  on  the  11th  of  April  these  fixcts  were  communicated  to 
the  defendants,  and  the  note  tendered  them,  and  the  money  they  had  re- 
ceived from  the  carrier  demanded  by  the  plaintiffs,  and  refused  by  them. 

It  was  also  proved  that  the  promisors  had  not  funds  to  pay  the  note 
when  due  on  the  7th  of  April,  and  had  determined  not  to  pay  it,  and  would 
not  have  paid  it,  if  presented  ;  that  after  the  7th  they  paid  no  business 
debts  (this  being  one),  and  no  change  took  place  in  their  circumstances ; 
but  they  continued  in  possession  of  a  stock  of  dry  goods  nntil  the  17th  of 
April,  when  they  were  sued  by  the  defendants  on  the  note  which  fell  due 
on  the  13th  of  April,  and  an  attachment  of  their  stock  made,  which  was 
afterwards  dissolved  by  an  assignment  of  their  estate  nnder  the  insolvent 
laws ;  and  the  second  note  was  never  paid,  but  was  proved  in  insolvency 
against  their  estate. 

Upon  these  facts,  the  defendants  contended  that  there  was  no  such 
privity  or  agency  proved  to  have  existed  between  the  parties,  as  to  enable 
the  plaintiffs  to  maintain  this  action  ;  and  that,  as  the  mistake  arose  from 
the  negligence  of  tl>e  plaintiffs,  they  had  no  remedy  against  tlio  defendants. 
A  verdict  was  taken  by  consent  fur  the  plaintiffs,  subject  to  the  opinion  of 
the  full  court. 

D.  S.  RkharJson  and  TI^.  A.  liiiharJson  f«jr  the  plaintiffs. 

J.  G.  Abbott  for  the  defendants.* 

BiGELOW,  J.  This  view  of  the  legal  relation  of  the  parties  is  decisive  of  the 
remaining  objection  to  the  plaintiffs'  right  of  recovery  in  this  action.  Tlio 
money  was  clearly  paid  over  to  the  defendants  under  a  mistake  of  fact,  and, 
upon  familiar  principles,  an  action  can  bo  maintained  to  recover  it  back.  It 
is  no  answer  to  the  plaintiffs'  claim,  that  the  mistake  arose  from  tlio  negli- 
gence of  the  plaintiffs.     The  ground  on  which  the  rule  rests  is,  that  money, 

*  A  portion  of  the  oiiiiiion  relating  to  questions  of  ngi-iiry  has  been  oiiiiltod.  —  En. 


432  STANLEY   RULE   AND   LEVEL   COMPANY    V.    BAILEY.       [CIIAP.  IL 

paid  through  misapprehension  of  facts,  in  equity  and  good  conscience  be- 
longs to  the  party  who  paid  it ;  and  cannot  be  justly  retained  by  the  party 
receiving  it,  consistently  with  a  true  application  of  the  real  facts  to  the 
legal  rights  of  the  parties.^  The  cause  of  the  mistake  therefore  is  wholly 
immaterial.  The  money  is  none  the  less  due  to  the  plaintiffs,  because 
their  negligence  caused  the  mistake  under  which  the  payment  was  made. 
The  case  would  have  been  different,  if  it  had  appeared  that  the  defendants 
had  suffered  any  damage,  or  changed  their  situation  as  respects  their 
debtor,  by  reason  of  the  laches  of  the  plaintiffs.  But  the  fjicts  show  that 
their  rights  were  wholly  unaffected  by  the  mistake  under  which  the  pay- 
ment was  made.  Nothing  occurred  subsequently  to  the  pa^^ment,  which 
renders  it  unconscientious  to  recover  the  money  back.  It  is  therefore 
clear  that  the  defendants  have  money  belonging  to  the  plaintiffs  in  their 
hands,  to  which  they  show  no  legal  or  equitable  title.  Kelly  ?'.  Solari ;  ^ 
Bell  V.  Gardiner;'  2  Smith's  Lead.  Cas.  243,  244. 

Jtidgment  on  the  verdict.* 


THE  STANLEY  RULE   AND   LEVEL   COMPANY  v. 
LEONARD   BAILEY. 

In  the  Supreme  Court  of  Errors  op  Connecticut,  January  Term,  1878. 

[Reported  in  45  Connecticut  Reports,  464.] 

Assumpsit,  to  recover  back  money  claimed  to  have  been  paid  under  a 
mistake  of  facts ;  brought  to  the  Court  of  Common  Pleas  of  Hartford 
County.  The  facts  were  found  by  a  committee,  and  on  the  facts  the  court 
(McManus,  J.)  rendered  judgment  for  the  plaintiff's.  The  defendant 
brought  the  record  before  this  court  by  a  motion  in  error.  The  case  is 
sufficiently  stated  in  the  opinion. 

G.  G.  Sill  for  the  plaintiff  in  eiTor. 

C.  E.  Mitchell  for  the  defendants  in  error. 

Park,  C.  J.  We  think  the  finding  of  the  court  below,  that  the  money 
sought  to  be  recovered  in  this  suit  was  paid  by  the  plaintiffs  to  the  defendant 
through  misapprehension  of  the  facts  with  regard  to  their  obligation  to  pay 
it,  is  decisive  of  the  case.  It  is  conceded  that  the  plaintiffs  are  entitled 
to  recover  a  part  of  the  amount,  and  we  think  it  is  equally  clear  they 
ought  to  recover  the  whole.  That  part  of  it  which  is  in  dispute  was  paid 
to  the  defendant  as  a  royalty  for  the  privilege  of  manufacturing  and  selling 
certain  articles,  under  certain  patents,  of  which  the  defendant  previous  to 
this  time  was  the  owner.     The  money  was  paid  according  to  the  terms  of 

1  2  Saund.  PI.  &  Ev.  2d  Ed.  394.  2  9  m.  &  W.  54.  ^  4  ]^[an.  &  G.  11. 

*  Lawrence  v.  American  National  Bank,  54  N.  Y.  432;  Guild  v.  Baldridge,  2  Swan, 
295,  accord.  —  Ea 


SECT.  I.]      STANLEY   RULE    AND   LEVEL   COMPANY    V.    BAILEY.  433 

a  cert;iin  contract  between  the  parties,  wlierein  the  defeiidaut,  for  the  con- 
sideration of  a  certain  royalty  to  be  paid  on  all  the  articles  covered  by  the 
patents  which  should  be  manufactured  and  sold  by  the  plaintiffs,  {^Tantcd 
them  the  privilege  of  manufacturing  and  selling  them  during  the  continuance 
of  the  patents  and  any  extension  of  them.  The  plaintiffs  manufactured 
and  sold  the  articles,  and  paid  the  royalty  according  to  the  terms  of  the 
contract.  In  the  mean  time  some  of  the  defendant's  patents  expired  and 
Avere  not  extended,  but  the  plaintiffs  being  ignorant  of  the  fact  continued 
to  pay  the  royalty  as  they  had  done  before,  and  paid  the  sum  which  they 
now  seek  to  recover  on  patents  which  had  thus  expired.  The  defendant 
knew  that  the  patents  had  expired  and  had  not  been  renewed  at  the  time 
he  received  the  money ;  but  believing  that  he  had  the  right  to  receive  it 
under  the  contract,  did  not  state  the  fact  to  the  plaintiffs. 

It  further  appears  that  the  plaintiff's  paid  the  money  believing  that  the 
patents  were  in  force,  and  that  they  would  not  have  paid  it  had  they  known 
the  facts.  But  it  is  said  that  they  had  the  means  of  knowledge,  and  that 
this  is  equivalent  to  knowledge  itself.  There  may  be  such  full  and  complete 
means  of  knowledge  as  to  be  equivalent  to  knowledge  itself,  but  we  think 
this  is  not  such  a  case.  The  defendant  owned  the  patents.  He  was  in  the 
employ  of  the  plaintiffs.  The  patents  were  on  a  large  number  of  articles ; 
and  some  of  them  were  covered  by  two  or  more  patents  of  different  dates. 
The  case  was  a  complicated  one,  and  required  thorough  examination  to 
determine  the  exact  fact.  It  would  naturally  be  expected  that  the  defend- 
ant would  keep  himself  informed  on  the  matter,  and  being  in  the  employ- 
ment of  the  plaintiffs  would  inform  them  when  the  patents  expired.  This 
would  reasonably  be  expected  by  the  plaintiffs  where  they  had  no  reason 
to  suspect  dishonesty  in  the  defendant ;  and  we  tliink  they  had  a  right  to 
rely  on  what  would  ordinarily  be  expected  under  the  circumstances.^ 

It  is  further  claimed  that,  whatever  might  otlierwise  be  the  right  of  the 
plaintiffs  to  repayment,  they  have  lost  the  right,  inasmuch  as  they  made  a 
voluntary  payment  of  the  royalty  on  articles  covered  by  the  remaining 
patents,  after  they  had  become  apprised  of  the  fact  that  they  had  paid  the 
royalty  on  patents  which  had  expired.     This  claim  is  made  upon  the  idea 
that  the  last  payment  made  the  first  payment  volinitary,  although  it  was 
not  so  originally.     But  a  payment  is  either  voluntary  or  involuntary  at  the 
time  it  is  made,  and  nothing  can  occur  afterwards  to  alter  its  character  in 
this  respect.     As  well  might  it  be  claimed,  if  A.  sues  B.  upon  a  note,  and  B. 
has  a  claim  against  A.  for  work  done  at  his  request,  that  uidess  B.  sets  off 
his  claim  against  A.'s  demand  he  thereby  acknowledges  tliat  he  has  no  claim, 
and  cannot  afterwards  recover  it.     This  claim  is  clearly  without  fountlation. 
There  is  no  error  in  tlic  judgment  complained  of 
In  this  opinion  the  other  judges  concurred. 

1  A  portion  of  tlic  oiiiuioii  rcliiting  to  the  consliiicticni  nf  tin'   cniilr.Kl    li;is   been 
omitted.  —  Ed. 

9S 


i34:  McARTHUR   V.   LUCE.  [CHAP.  IL 


DOUGALD   McARTHUR  v.  THEODORE  LUCE,  et  al. 
In  the  Supreme  Court  of  Michigan,  April  28,  1880. 

[Reported  in  43  Michigan  Reports,  435.] 

Error  to  Alpena.     Submitted  April  22.     Decided  April  28. 

Assumpsit.     Plaintiff  brings  error. 

Kelley  and  Clayherg  for  plaintiff  in  error. 

Turnbull  and  McDonald  for  defendant  in  error. 

Marston,  C.  J.  Luce  &  Co.,  in  demanding  that  McArthur  pay  them 
for  logs  cut,  as  they  supposed,  upon  their  land,  acted  in  entire  good  faith. 
They  had  a  survey  made,  and  according  thereto  the  plaintiff  had  cut  logs 
over  the  line.  When  the  claim  was  made  upon  the  plaintiff  he  employed 
a  surveyor  and  they  went  upon  the  land,  and  plaintiff  then  became  satisfied 
that  he  had  cut  and  taken  logs  from  off  defendants'  land,  and  authorized  a 
settlement  to  be  made,  which  was  done.  This  was  in  1871,  and  all  pai-ties 
rested  in  the  belief  that  a  correct  settlement  had  been  made  until  some 
time  in  1875,  when  a  new  survey  established  the  fact  that  no  logs  had  been 
cut  upon  defendants'  land,  and  this  action  was  brought  to  recover  back  the 
moneys  paid,  upon  the  claim  of  having  been  paid  under  a  mistake  of  fact. 

Where  a  claim  is  thus  made  against  another  who,  not  relying  upon  the 
representations  of  the  claimant,  has  the  opportunity  to  and  does  investigate 
the  facts,  and  thereupon  becomes  satisfied  that  the  claim  made  is  correct 
and  adjusts  and  pays  the  same,  1  think  such  settlement  and  payment  should 
be  considered  as  final.  If  not,  it  is  very  difficult  to  say  when  such  disputed 
questions  could  be  considered  as  finally  settled,  or  litigation  ended.  In  the 
settlement  of  disputed  questions  where  both  parties  have  equal  opportunity 
and  facilities  for  ascertaining  the  facts,  it  becomes  incumbent  on  each  to 
then  make  his  investigation,  and  not  carelessly  settle,  trusting  to  future 
investigation  to  show  a  mistake  of  f[\ct  and  enable  him  to  recover  back  the 
amount  paid.  One  course  encourages  carelessness  and  breeds  litigation 
after  witnesses  have  passed  beyond  the  reach  of  the  parties  :  the  other 
encourages  parties  in  ascertaining  what  the  facts  and  circumstances  actually 
are  while  the  transaction  is  fresh  in  the  minds  of  all,  and  a  final  and  peace- 
ful settlement  thereof.  Detroit  Advertiser  &  Ti'ibune  Co.  v.  Detroit,^  and 
County  of  Wa^'ne  v.  Randall.^ 

The  judgment  must  be  affirmed  with  costs. 

The  other  justices  concurred.^ 

1  43  Mich.  116.  2  43  Midi.  137. 

8  In  Windbiel  v.  Carroll,  16  Hun,  101,  it  was  held  that  one  who  pays  a  claim  knowing 
that  it  has  been  paid  before,  but  ignorant  of  the  means  of  proving  that  fact,  cannot  recover 
the  money  so  paid.     Conf.  Guild  v.  Baldridge,  2  Swan,  295.  —  Ed. 


SECT.  I.]  ATTORNEY-GENERAL  V.   PERRY.  435 


(J.)  Defence  of  Purchase  for  Value. 

ATTORNEY-GENERAL  v.   PERRY. 
In  the  Exchequer,  Easter  Term,  1735. 

[Reported  in  Comyns,  481.] 

This  was  an  information  by  the  Attorney-General  for  623/.  14s.  3J.  half- 
penny, due  to  his  Majesty  for  so  much  money  received  by  the  defendant 
for  his  late  Majesty's  use,  between  April  the  1st,  1725,  and  the  Ist  of 
September  following. 

The  defendant  pleads  that  he  is  not  indebted  for  the  said  sum. 

Upon  a  trial  by  a  jury  of  Middlesex,  they  find  specially  to  the  efTect 
following,  viz.:  That  on  the  24rth  of  September,  172-1,  the  defendant  im- 
ported into  the  port  of  London  28,333  pounds  weight  of  Virginia  tobacco, 
and  paid  custom  for  the  same,  viz.,  88/.  lOs.  dd.  halfpenny  for  the  old  sub- 
sidy, and  gave  security  by  bond  to  pay  535/.  3s.  Gd.  halfpenny  for  the 
additional  duties  due  to  his  late  Majesty  on  importation  of  the  said  tobacco. 
That  in  May,  1725,  the  defendant  sold  the  said  tobacco  to  Richard  Corbet, 
for  exportation  to  Cadiz  in  Spain,  and  shipped  off  the  same  in  the  port  of 
London  in  the  ship  called  the  Francis  and  Mary,  Isaac  Cocart,  master,  for 
Cadiz.  That  on  the  14th  of  July,  1725,  Richard  Corbet  made  oath  before 
the  proper  officer,  that  he  had  the  direction  of  the  said  voyage,  and  that 
all  the  said  tobacco  so  shipped  was  exported  really  and  truly  for  parts 
beyond  the  seas,  on  commission,  and  that  none  of  the  said  tobacco  had 
been  since  landed,  or  was  intended  to  be  relanded  in  Great  Ijiitain  or 
Ireland. 

That  John  Walkley,  the  defendant's  servant,  made  the  usual  oath,  that 
the  duty  of  the  said  tobacco  was  paid  or  secured,  and  that  the  defendant  had 
sold  it  for  exportation.  That  on  the  5th  of  Juno,  1725,  a  declaration  of 
the  contents  of  the  loading  of  the  said  ship  was  made  in  these  words  :  A 
content  in  the  Francis  and  Mary,  Isaac  Cocart,  for  Cadiz,  40  ton,  5  men, 
4  guns,  1,  38.  Micha.  Perry,  etc.  That  on  the  same  day  Isaac  Cocart  mudu 
oath  under  the  said  content  before  the  proper  officer,  that  the  said  CDntciit 
contained  a  just  and  true  account  of  all  the  goods,  etc.,  on  board  his  sliip 
f(;r  the  present  voyage,  and  that  ho  would  take  no  more  goods  on  board 
without  first  i)aying  custom,  and  having  a  warrant  from  the  King's  officers; 
and  that  if  he  shoidd  take  on  board  any  certificate  goods,  or  goods  that 
received  a  drawback,  bounty,  or  premium  on  exportation,  that  ho  would  not 
reland  them,  or  suffer  them  to  be  unshipped  in  order  to  bo  relanded,  with- 
out the  presence  of  the  King's  officers. 


436  ATTORNEY-GENERAL   V.    PERRY.  [CHAP.  IL 

That  the  said  tobacco  being  so  put  ou  board  the  ship,  and  certified  by 
the  proper  officers  of  the  customs,  two  debentures  were  made  out ;  one  for 
the  drawback  of  881^.  lOs.  9d.  halfpenny;  tiie  other  for  the  drawback  or 
discharge  of  the  5351.  3s.  6d.  halfpenny,  secured  by  the  defendant,  upon 
■which  the  defendant,  on  the  13th  of  August,  1725,  received  back  the  88/. 
10s.  9ri.  halfpenny;  and  on  the  17th  of  August,  1725,  had  his  bond  for  the 
535/.  3s.  6(7.  halfpenny  delivered  np  to  him. 

That  this  tobacco  after  it  was  put  on  board  was  landed  in  Ireland  on  the 
28th  of  July,  1725,  but  without  the  defendant's  privity,  nor  had  he  the 
property  in  it  from  the  time  it  was  put  on  board,  nor  the  direction  of 
the  voyage;  but  it  was  sold  by  the  defendant  for  12697.  lis.  2d.  for 
exportation  to  the  said  Richard  Corbet ;  whereof  045/.  16s.  lOd.  half- 
penny was  paid  in  money,  and  the  debentures  were  taken  for  the  re- 
mainder of  the  price,  and  if  by  any  accident  the  debentures  became  void, 
the  said  Richard  Corbet  was  to  answer  the  amount  in  money  to  the 
defendant. 

That  Richard  Corbet  hath  been  absent  five  years,  but  the  King's  officers 
had  no  notice  of  the  tobacco  being  landed  in  Ireland  till  June,  1733.  jEt  si 
%xipra  totam,  etc. 

Attorney-Genercd  and  Solicitor-General,  for  the  Crown. 

Mr.  Strange  and  Mr.  Bootle,  for  the  defendant. 

And  on  full  consideration  of  the  case,  Reynolds,  C.  B.,  Carter  and 
FoRTESCUE,  BB.,  against  Thomson,  B.,  were  of  opinion,  first,  That  the 
debenture  for  the  drawback  given  by  Corbet  to  the  defendant,  by  landing 
the  tobacco  in  Ireland,  became  void ;  for  no  drawback  ought  to  be  made 
unless  the  goods  be  exported  ;  the  words  of  the  statute  13  &  14  Car.  2.  c.  11, 
are  express.  No  allowance  shall  be  made  or  demanded  if  the  goods  be  re- 
landed,  etc.  And  so  by  the  statute  6  Geo.  c.  21,  if  landed  in  Ireland  the 
debenture  for  the  drawback  shall  be  void. 

Second,  that  the  payment  of  the  money  to  the  defendant  by  the  King's  of- 
ficers upon  this  void  debenture  renders  the  defendant  answerable  to  the  King 
for  the  money  by  him  received  ;  for  whoever  receives  the  King's  money,  with- 
out warrant  or  lawful  authority,  is  accountable  to  the  King  for  it.  This 
is  expressly  resolved  by  two  Chief  Justices  and  the  Chief  Baron,  11  Co.  90, 
the  Earl  of  Devonshire's  case,  who  was  Master  of  the  Ordnance,  and  by 
Privy  Seal  2  Jac,  reciting  that  munition  utterly  decayed  and  unserviceable 
had  been  claimed  as  fees  and  vails  to  the  Master  of  the  Ordnance  by  reason 
of  his  said  office  belonging  ;  and  giving  him  authority  to  dispose  of  such  of 
them  as  were  set  down  in  a  book,  etc.,  he  had  disposed  of  several  pieces  of 
iron  ordnance,  shot,  and  munition  in  the  said  book  set  down  ;  for  those 
things  being  received  and  disposed  by  him  by  color  of  a  Privy  Seal,  which 
was  void,  because  founded  on  a  false  suggestion  (for  it  suggests  that  these 
were  fees  or  vails  claimed  as  belonging  to  the  said  office,  which  must  mean 
lawfully  claimed  and  lawfully  belonging,  which  was  not  true,  for  this  was  a 


SECT.  I.]  ATTOENEY-GEKERAL   V.    PERRY.  437 

new  ofl&ce  erected  35  II.  8.),  the  Earl  was  accountable  for  them  as  much  as 
if  he  had  taken  them  without  any  Privy  Seal.  So  in  Sir  Walter  Mildmay's 
case,^  cited,  11  Co.  91,  and  reported  Cro.  Eliz.  545;  Mo.  475,  who  beiug 
Chancellor  of  the  Exchequer  received  140/.  a  year  for  thirty  yeai-s  together, 
by  warrant  from  the  Lord  Treasurer,  as  au  augmentation  of  his  fees,  since 
the  Court  of  Wards  was  aunexed  to  the  exchequer,  whereby  his  labor  was 
much  increased;  but  because  such  warrant  was  void,- it  was  resolved  that 
he  should  answer  for  the  monies  which  he  had  received. 

And  this  is  not  from  any  peculiar  prerogative  the  Crown  hath  above  a 
subject,  for  the  case  would  be  the  same  with  regard  to  a  common  pereon ; 
whenever  a  man  receives  money  belonging  to  another  without  any  reason, 
authority,  or  consideration,  an  action  lies  against  the  receiver  as  for  money 
received  to  the  other's  use ;  and  this,  as  well  where  the  money  is  received 
through  mistake  under  color,  and  upon  an  appreheusiou,  though  a  u)istaken 
apprehension,  of  having  a  good  authority  to  receive  it,  as  where  it  is  received 
by  imposition,  fraud,  or  deceit  in  the  receiver  (for  there  is  always  an  impo- 
sition and  deceit  upon  him  that  pays,  where  it  is  paid)  by  color  of  a  void 
warrant  or  authority,  although  the  receiver  be  innocent  of  it. 

Cases  might  be  cited  to  warrant  every  part  of  this  rule ;  but  as  the 
defendant  appears  to  be  an  inuocent  person,  wholly  ignorant  of  the  fraud 
of  Corbet  in  landing  the  tobacco  in  Ireland,  and  one  who  thought  he  had 
a  good  debenture,  and  was  lawfully  entitled  to  receive  the  drawback,  it  is 
necessary  to  instance  only  cases  where  the  party  receiving  thought  at  the 
time  of  his  receipt  that  he  had  a  good  authority  to  do  so,  but  afterwards 
discovers  that  he  had  not ;  as  where  a  man  having  a  grant,  an  office,  or 
couvevauce  of  lands,  and  thinking  himself  well  entitled  receives  the  rents 
and  profits,  it  is  well  known  that  if  it  afterwards  appear  that  tlie  grant  or 
title  is  not  good,  the  receiver  is  chargeable  by  the  rightful  officer  or  owner 
of  the  land  for  so  much  money  received  to  his  use.  2  Mod.  2G0,  2G3 ;  2  Jon. 
127  2;  2  Lev.  245;  3  Lev.  202.* 

The  cases  cited  by  Mr.  Attorney-General  are  strong  to  the  same  purpose. 
A  man  insuring  a  ship,  on  a  rumor  tliat  the  sliip  is  lost,  pays  the  insurance, 
and  it  afterwards  appears  that  the  ship  is  not  lost,  tlie  insured  shall  pay 
back  the  money.*  And  Jacob  and  Alleu.^  By  TuKVOU,  C.  J.,  if  an  ad- 
ministrator  authorizes  A.  to  collect  the  debts  ami  effects  of  his  intestate, 
which  he  receives  and  pays  over,  and  then  a  will  is  discovered,  the  rightful 
executor  may  bring  assumpsit  against  A.  for  what  he  has  received,  as  money 
received  to  his  use.  It  was  there  insisted,  that  A.  was  only  agent  for  the 
administrator,  received  tlie  money  for  his  use,  and  lia<l  paid  it  to  him  ;  yetj 
held,  that  the  administration  being  void,  the  administrator  could  give  no 
ftuth'ority,  and  consequently  A.  received  witliout  auth.-rity,  and  th.n  notlir 

1  Orvlh.  292;  2  Roll.  \hr.  VU.  "  1  Fn-cin.  478  ;  s.  c.  '2  .Show.  2L 

8  3  M'xl.  239  ;  1  Show.  35  ;  Curth.  90  ;  H.  c.  Comb.  151. 

i  1  Salk.  22.  •  1  Salk.  27.  2  Aim. 


438  ATTORNEY-GENERAL   V.   PERRY.  [CHAP.  11. 

ing  hinders  the  raising  an  implied  contract,  and  charging  the  defendant  in 
an  indebitatus  assumpsit. 

So  in  the  case  of  Martin  and  Sitwell,^  where  Barkedale  had  made  a  policy 
of  insurance  for  51.  premium  in  the  plaintiff's  name,  and  paid  the  money  to 
the  defendant,  and  it  afterwards  appeared  that  the  defendant  had  no  goods 
on  board,  upon  which  Martin  brought  assumpsit  for  the  51.  premium,  and 
it  was  insisted  that  ihis  was  money  received  from  B.  and  to  his  use ;  but 
as  Martin  was  trustee  for  B.  the  payment  by  B.  must  be  taken  as  agent 
for  him ;  whereby  it  is  plain  that  there  is  no  force  in  that  objection,  that 
the  defendant  acted  as  agent  for  Corbet,  and  received  the  drawback  by  his 
authority,  and  for  his  use. 

But  it  is  further  objected,  that  Corbet  being  the  person  who  committed 
the  fraud,  who  was  the  exporter,  and  entitled  to  the  drawback,  the  Crown 
ought  to  pursue  their  remedy  against  him,  and  not  against  the  defendant, 
who  was  innocent,  and  took  this  money  only  in  his  own  behalf,  and  for 
satisfaction  of  a  debt  owing  to  him  from  Corbet, 

It  is  certain  that  for  any  penalty  forfeited  by  the  landing  in  Ireland, 
Corbet,  and  not  the  defendant,  ought  to  be  prosecuted ;  but  when  Corbet 
obtains  a  debenture,  which  he  himself  makes  void  and  ineffectual,  and  de- 
livers this  debenture  as  payment  for  the  tobacco  he  bought  of  the  defend- 
ant, what  need  is  there  to  resort  farther  than  to  him  who  liad  the  money 
from  the  Crown  ?  Hasser  and  Wallis.^  A  man  marries  a  woman  seised  of 
lands,  and  takes  the  rents  and  profits,  but  afterwards  it  appears  that  he 
had  a  former  wife  then  living ;  upon  which  she  brings  assumpsit  against 
the  husband  for  money  received  to  her  use  ;  and  though  it  was  objected, 
that  the  payment  to  him,  who  had  no  authority  to  take  the  rents,  was  ab- 
solutely void,  and  that  the  tenants  might  be  sued,  for  the  money  still  lay 
in  their  hands,  and  they  might  sue  Wallis  ;  yet  the  court  held  that  the 
action  was  maintainable  against  Wallis  who  received  the  rents,  and  that  a 
recovery  against  him  would  be  a  discharge  to  the  tenants. 

As  to  the  case  of  Tomkins  and  Barrett,^  upon  an  usm-ious  contract,  the 
case  appears  to  be  good  law;  the  same  case  is  reported  in  Skin.  p.  411. 
But  there  is  a  mistake  in  one  of  the  reports,  for  Salkeld  saith  that  it  was 
in  the  Common  Pleas,  and  came  to  trial  l)efore  Chief  Justice  Treby; 
Skinner,  that  it  was  in  the  King's  Bench,  and  came  to  trial  befere  Chief 
Justice  Holt;  unless  it  can  be  supposed,  that  the  same,  which  in  both 
reports  is  said  to  be  H.  5  W.  &  M.,  should  after  a  nonsuit  in  one  court  be 
brought  on  to  trial  in  the  other  court;  for  this  is  an  exception  to  the 
general  rule,  that  where  a  man  receives  money  for  an  unlawful  purpose,  or 
upon  an  illegal  contract,  he  who  is  party  to  the  unlawful  act  shall  not 
exempt  himself,  and  defeat  what  himself  hath  done,  by  falling  on  his  accom- 
plice, who  is  not  more  criminal  than  himself;  as  in  the  case  there  put,  if 

1  1  Show.  156  ;  s.c.  Holt,  25.  "  1  Salk.  28. 

8  1  Salk.  22. 


SECT.  I.]  YOUMANS   V.   EDGERTON.  439 

a  man  gives  money  to  A.  to  bribe  the  custom-house  officers,  who  pays  it 
accordingly,  he  shall  not  afterwards  charge  A.  for  this  money  as  received 
to  his  use. 

So  if  a  man  gives  a  bond  upon  an  usurious  contract,  and  pay  part  of  the 
money,  and  afterwards  an  action  is  brought  on  the  bond,  to  which  the 
statute  is  pleaded,  and  the  bond  thereby  avoided,  he  who  paid  part  shall 
not  maintain  an  action  against  the  receiver,  as  for  so  much  received  to  his 
use,  for  he  was  party  to  this  usurious  agreement ;  and  though  an  act  of 
Parliament  makes  the  bond  void,  yet  it  is  only  to  him  who  claims  the 
benefit  of  the  statute  and  pleads  it ;  for  if  he  plead  non  est  factum,  or  solvit 
ad  diem,  the  plaintiff  will  recover;  if  tlicn  he  pay  the  money,  he  waives  the 
advantage  of  the  statute ;  and  a  party  equally  faulty,  who  pays  his  money 
pursuant  to  a  faulty  agreement,  ought  not  to  have  it  back  again  ;  so  that 
the  reasons  given  by  Trebt,  that  the  plaintiff  in  such  case  isparticeps  crim- 
inis,  etc.,  volenti  non  Jit  injuria,  seem  not  altogether  so  improper. 

The  objection  made,  that  in  this  case  no  privity  was  between  the  King 
and  the  defendant,  was  likewise  made  in  the  Earl  of  Devonshire's  case,^ 
and  in  Sir  Walter  Mildmay's  case  there  cited;  but  it  was  there  answered, 
that  in  the  case  of  the  Crown  the  law  will  raise  and  create  a  privity  so  as 
to  render  him  accountable  who  receives  any  of  the  King's  money. 

And  in  case  the  defendant  be  chargeable,  the  executors  will  be  so  like- 
wise;  they  were  resolved  so  to  be  in  both  these  cases. 

All  the  Barons  agreed  that  the  delivering  up  the  bond  could  not  be  con- 
sidered as  money  received  to  the  King's  use ;  and  therefore  it  was  adjudged 
by  the  court,  that  his  Majesty  do  recover  against  the  said  Micajah  Perry 
the  sum  of  88/.  10s.  M.  halfpenny,  being  so  much  by  him  unjustly  received 
in  money  of  the  officers  of  the  customs  for  the  duty  inwards,  called  the  old 
subsidy;  but  as  to  the  residue  of  the  said  023/.  14s.  3(/.  halfpenny  in  the 
said  information  mentioned,  that  the  said  Micajah  Perry  do  go  without  a 
day  as  to  such  residue,  saving  his  Majesty's  right,  if  he  shall  think  fit  here- 
after to  prosecute  him  for  it. 


WILLIAM   YOUMAXS,    Respondent,   v.   ArOLLOS    C.    EDGERTON, 

ArrELLANT. 

In  the  Supreme  Couut  op  New  York,  Novembeh  Term,  1878. 

[Reported  in  IG  //»«,  28.] 
Appeal  from  a  judgment  in  favor  of  the   plaintiff,  entered  upon    the 
report  of  a  referee. 

The  action  was  brought  by  the  ])laintiir  as  assignee  of  William  T.  Kilmer 
and  John  Hodge  against  dcfeiidaut,  to  recover  money  i)aid  on  a  contract 
for  the  purchaKCof  land,  made  by  Kilmer  with  one  James  11.  Shaver. 

»  11  Co.  90. 


440  YOUMANS   V.   EDGERTON.  [CHAP.  II. 

Oue  Knapp  \vn,s  the  original  owner  of  lot  number  eleven,  in  regard  to 
which  this  claim  arises.  In  1859  he  entered  into  a  written  contract  to  sell 
this  lot  for  .f  GOO  to  Townsend  Shaver,  and  to  give  him  a  warranty  deed ; 
the  last  instalment  payable  June  1,  18G5.  Townsend  Shaver  went  into 
possession  and  remained  in  possession  till  he  sold  to  James  R.  Shaver,  but 
paid  nothing.  In  1864,  Townsend  Shaver  made  a  written  contract  with 
James  R.  Shaver  to  sell  him  this  lot  for  $1097.34,  and  to  give  him  a  war- 
ranty deed,  the  last  instalment  payable  June  1,  1869.  James  R.  Shaver 
went  into  possession  and  remained  in  possession  till  he  sold  to  Kilmer. 
The  referee  finds  that  there  is  no  evidence  of  payment  on  this  contract. 
In  February,  1867,  James  R.  Shaver  made  a  written  contract  wuth  Kilmer 
to  sell  him  this  lot  and  lot  ten  for  §1500,  and  to  give  a  good  and  sufficient 
deed,  the  last  instalment  payable  June  1,  1874.  Kilmer  soon  after  paid 
Shaver  S200,  and  took  possession.  Afterwards,  in  April,  1867,  James  R. 
Shaver,  for  a  good  and  valuable  consideration,  sold  and  delivered  the  last- 
mentioned  Kilmer  contract  to  the  defendant,  and  assigned  it  to  him  by  a 
■written  assignment  thereon.  The  defendant  took  this  assignment  in  good 
faith,  and  paid  the  full  value  thereof,  and  soon  after  gave  Kilmer  notice 
that  he  held  the  contract.  James  R.  Shaver  did  not  assign  to  the  defend- 
ant the  contract  which  he  held  of  Townsend  Sliaver,  unless  such  assign- 
ment is  to  be  inferred  from  the  assignment  of  the  Kilm.er  contract.  The 
defendant  made  no  agreement  with  James  R.  Shaver  to  perform  the  Kilmer 
contract.  Afterwards  Kihner  gave  the  defendant  a  chattel  mortgage,  from 
which  the  defendant,  about  April,  1869,  realized  $200  as  a  part  payment 
on  the  contract.  Afterwards,  and  in  April,  1869,  Kilmer  assigned,  in  writ- 
mg,  to  one  Hodge  his  contract  with  Shaver.  Kilmer  agreed  to  pay  Hodge 
$200,  and  the  amount  that  Hodge  should  pay,  and  Kilmer  was  to  remain 
in  possession.  Kilmer  did  remain  in  possession  till  1873,  and  then  the 
premises  were  occupied  by  one  Biyden,  imder  Hodge,  for  about  a  year,  and 
till  the  spring  of  1874.  On  the  15th  of  April,  1874,  Hodge  entered  into  a 
written  contract  with  one  Keeler  and  one  Wilson  to  sell  them  the  lots  ten 
and  eleven  for  $1700.  They  took  possession  of  the  premises  till  the  fall  cf 
1874,  when  they  agi*eed  with  Hodge  to  abandon,  and  did  abandon  the 
premises.  At  sundry  times  between  April  20,  1869,  and  June  10,  1874, 
Hodge  made  payments  to  defendant  on  the  Kilmer  contract,  and  the  last 
payment  fully  paid  it  up.  In  December,  1874,  Hodge  assigned  the  Kil- 
mer contract  to  the  plaintiff,  and  also  all  causes  of  action  against  Shaver 
and  the  defendant  for  breach  of  contract. 

At  the  time  that  Hodge  made  the  last  payment  to  the  defendant,  he  de- 
manded a  deed  of  the  premises.  On  defendant's  refusal,  Hodge  demanded 
back  the  moneys  paid  by  him.  The  referee  finds  that  all  of  the  payments, 
except  the  last,  were  made  and  received  in  ignorance  of  the  fact  that  Knapp 
had  the  title,  and  in  the  belief  that  James  R.  Shaver  had  a  good  title  when 
he  entered  into  the  contract  with  Kilmer.     It  was  claimed  by  the  plaintiff" 


SECT.  I.]  YOUMAXS   V.   EDGERTON.  441 

and  denied  by  tlic  defendant,  tliat  the  defendant  promised  Hodge  to  give 
liini  a  deed  on  the  fulfihiient  of  the  contract.  The  referee,  in  his  opinion, 
states  that  he  makes  no  finding  on  that  point.  The  referee  held  that  the 
plaintift"  was  entitled  to  recover  back  of  the  moneys  paid  to  the  defendant, 
such  proportion  as  the  vahie  of  lot  munber  eleven  bure  to  the  whole 
moneys,  excepting  such  last  payment,  which  was  made  with  knowledge. 

0.  W.  Sinilh  for  the  appellant. 

Yomnans  and  Xiles  for  the  respondent. 

Learned,  P.  J.  The  plaintitl'  claims  to  recover  this  money  on  two 
grounds.  First.  As  money  paid  upon  a  consideration  wiiich  has  failed. 
Second.    As  money  paid  under  mutual  mistake  of  fact. 

First.  The  question  presented  in  the  first  ground  is  this  :  If  A.  contracts 
to  sell  land  to  B.,  and  then  for  a  valuable  consideration  assigns  B.'s  con- 
tract to  C,  and  if  B.  pays  C.  the  contract-price,  and  then  A.  refuses  to  con- 
vey, can  B.  recover  from  C.  for  breach  of  contract  or  failure  of  consitlerationl 
It  seems  to  me  that  he  cannot,  unless  C.  has  contracted  with  A.  to  fulfil 
the  contract.  Then,  under  the  doctrine  of  Lawrence  v.  Fox,^  B.  might  have 
the  benefit  of  C.'s  agreement  with  A.  If,  for  instance,  A.  had  not  only  as- 
signed the  contract,  but  had  also  conveyed  the  land  to  C,  on  consideration 
that  C.  would  perform  the  contract,  then  probably  B.  would  have  an  action 
on  C.'s  agreement.  But  in  the  absence  of  any  such  contract,  and  if  C.  had 
taken  from  A.  only  an  assignment  of  B.'s  contract,  T  cannot  see  that  C. 
would  be  liable  to  B.  Suppose  that  by  the  terms  of  the  agreement  B.  was 
to  give,  and  should  give,  his  notes  to  A.  as  a  consideration  for  tlie  land. 
If  A.  transferred  the  notes  to  C,  they  would  carry  with  them  no  obligation 
on  C.'s  part  to  perform  the  contract  of  sale. 

So,  in  the  present  case,  the  plaintiff  has  taken  Hodge's  rights  by  assign- 
ment ;  Hodge  took  Kilmer's  rights  in  the  same  way.  The  plaintiff  then 
stands  in  Kilmer's  place,  and  the  only  person  with  whom  Kilmer  had  a  con- 
tract was  James  R.  Shaver.  No  one  else  has  ever  agi-eed  to  convey  to  Kil- 
mer or  to  his  assignees.  The  defendant  paid  Shaver  in  full,  ami  only 
received  a  transfer  of  Shaver's  right  to  collect  the  payments  on  the  con- 
tract. He  assumed  no  contract  himself.  And  it  should  be  observed  that, 
strictly,  this  is  not  the  case  of  a  failure  of  consideration,  but  of  l)reach  of 
contract.  The  consideration  for  the  payments  made  by  Hodge  was  the  con- 
tract on  Shaver's  part  to  convey.  His  contract  was  executory.  On  per- 
formance by  Kilmer's  assignee,  the  assigneo  had  a  riirht  to  <leinand  a  deed. 
If  Shaver  did  not,  or  could  not  give  a  good  and  sullieient  deed,  thiMi  the 
action  against  him  would  be  on  the  breach  of  contract,  -—  on  the  l>reaeh  of 
the  written  contract,  —  not  on  any  imi)lied  lialtility  for  failure  of  considera- 
tion. Thus  in  Fletcher  v.  Button, *"  and  in  Lawrence  v.  Taylor,' both  cited 
by  the  plaintiff,  the  action  was  in  each  case  brought  for  the  breach  of  the 
written  obligation  to  convey  the  land. 

1  20  X.  Y.  268.  2  1  X.  Y.  30(>.  »  f.  Hill,  107. 


442  YOUMANS   V.   EDGERTON.  [CHAP.  IL 

The  contract,  then,  was  with  Shaver,  and  there  is  no  finding,  and,  so  far 
as  I  can  see,  no  evidence,  that  the  plaintiff  has  ever  demanded  a  deed  from 
him.  It  is  true,  that  the  referee  finds  that  the  legal  title  was  in  Knapp  up 
to  the  commencement  of  the  action.  But  it  does  not  follow  conclusively 
from  this  fact,  that  James  R.  Shaver,  if  demand  had  been  made  of  him, 
would  not  have  obtained,  through  the  Townsend  Shaver  contract,  a  good 
deed  from  the  owner.     At  any  rate  his  refusal  should  have  been  shown. 

Second.  The  plaintiff  claims  to  recover  this  money  as  paid  under  a 
mutual  mistake  of  fact ;  and  this  is  the  view  taken  by  the  learned  referee. 
It  is  veiy  important  to  see  exactly  what  the  mutual  mistake  is  on  which 
the  recovery  is  claimed.  The  money  was  paid  severally  by  Kilmer  and  by 
Hodge  to  the  defendant.  The  learned  referee  finds  that  when  the  payments 
(excepting  the  last)  were  made  and  received,  Kilmer,  Hodge  and  the  de- 
fendant were  in  ignorance  that  Knapp  had  the  title  to  the  lot,  and  that 
they  believed  that  at  the  time  when  James  E.  Shaver  made  his  contract 
with  Kilmer  he  had  a  good  title. 

Now,  I  have  already  pointed  out  that  the  defendant  was  ^honafide  pur- 
chaser for  full  value  from  Shaver  of  the  moneys  to  be  received  on  the 
Kilmer  contract.  It  will  readily  be  seen,  therefore,  that  the  principle  of 
recovering  money  paid  under  mutual  mistake  will  not  apply  to  him,  unless 
it  would  apply  to  Shaver,  if  he  had  not  assigned  to  the  defendant.  Sup- 
pose, then,  for  a  moment,  that  Kilmer  and  Shaver  had  made  this  contract 
tinder  the  mutual  mistake  (so  called)  above  stated,  and  that  Kilmer  had 
paid  Shaver  under  like  mistake,  what  would  have  been  Kilmer's  remedy  ] 
Not  an  action  for  money  paid  under  mutual  mistake,  but,  as  already 
pointed  out,  an  action  for  breach  of  contract  upon  the  failure  of  Shaver  to 
convey.  The  cases  referred  to  by  the  learned  referee  are  cases  of  an  exe- 
cuted contract ;  where,  for  instance,  a  deed  has  been  given  and  the  consid- 
eration paid,  but  the  grantor  had  no  title.  Now,  in  the  present  case,  it 
was  not  important  that  Shaver  had  no  title  when  he  executed  the  contract, 
if,  when  it  was  paid  up,  he  was  able  to  give  a  good  deed  which  should  con- 
vey the  title.  If  he  was  unable  then  to  conve}^  he  was  liable  on  his  con- 
tract. Money  is  not  paid  by  mistake  when  it  is  paid  on  an  executory 
contract,  and  the  consideration  for  the  payment  is  the  agreement  of  the 
other  party. 

But  further,  an  action  to  recover  back  money  paid  by  mistake  is  a  strictly 
equitable  action,  based  on  the  idea  that  the  defendant  ought  not  to  retain 
that  for  which  he  has  given  nothing.  Now  the  defendant  in  this  case  has 
given  the  full  value  for  the  money  he  has  received.  He  purchased  from 
Shaver  the  claim  against  Kilmer.  Shaver,  now  it  is  said,  cannot  perform 
his  part  of  the  contract  with  Kilmer.  It  is  then  Shaver  who  holds,  in  this 
view,  money  which  he  ought  to  refund ;  not  the  defendant.  The  defendant 
has  only  received  back  what  he  paid  to  Shaver.  The  plaintiff's  assignor 
trusted,  not  to  the  defendant's  promise,  but  to   Shaver's.     To  illustrate, 


SECT.  l]  merchants'    INSURANCE   CO.    V.    ABBOTT.  443 

suppose  that  Shaver  had  given  Hodge  a  deed,  and  had  taken  Hodge's  note 
or  bond  for  the  purchase-money,  and  had  then,  for  value  received,  trans- 
ferred tlie  note  or  bond  to  the  defendant,  and  Hodge  had  paid  the  same  to 
the  defendant.  If  subsequently  it  should  have  proved  that  Shaver  had  no 
title,  and  Hodge  should  have  sought  to  recover  back  the  money  as  paid 
under  mistake,  against  whom  would  the  action  lie,  if  at  all  ?  Clearly 
against  Shaver,  who  had  profited  by  the  transaction  ;  not  against  the  de- 
fendant, an  innocent  party,  who  had  not  profited  by  it.  If  the  present  re- 
covery be  sustained,  then  the  defendant  is  left  remediless;  and  Shaver,  the 
party  who  is  confessedly  to  blame,  retains  all  the  benefit  of  the  contract. 
For  the  defendant  would  seem  to  have  no  remedy  against  Shaver,  and 
Shaver  has  had  full  payment  on  the  contract.  It  was  proved  on  the  trial 
that  Shaver  is  insolvent.  That  fact  accounts  proba\)ly  for  the  attempt  to 
make  the  defendant  liable.  But,  of  course,  Shaver's  insolvency  is  no  rea- 
son for  the  defendant's  liability.  The  plaintiff  urged,  on  the  trial,  that 
there  was  evidence  that  the  defendant  agreed  with  Hodge  to  give  him  a 
deed.  An  examination  of  the  case  on  this  point  satisfies  me  that  this  was 
not  proved.  Some  other  questions  are  presented  as  to  the  allowance  of 
interest  before  demand,  and  as  to  the  effect  of  the  plaintiff's  possession,  and 
of  the  assignment  to  him  of  the  contract,  and  of  the  want  of  an  actual  sur- 
render.    But  it  is  unnecessary  to  pass  upon  them. 

The  judgment  should  be  reversed ;  a  new  trial  granted  ;  reference  dis- 
charged;  costs  to  abide  the  event. 

Present  —  Learned,  P.  J.,  Boardman  and  Bockes,  J  J. 

Judgment  reversed  and  new  trial  granted;  reference  discharged ;  costs  to 
abide  event. 


MERCHANTS'   INSUEANCE  COMPANY   OF   PROVIDENCE  v. 
CHARLES   W.   ABBOTT   and   Others. 

In  the  Supreme  Judicial  Court  of  ^Massachusetts,  September  13,  1881. 

[Reported  in  131  Massnchusetts  Reports,  307.] 

Gray,  C.  J.  These  actions  are  in  the  nature  of  assumj^sit  for  money 
had  and  received,  with  special  counts  alleging  that  the  plaiutifis  were  in- 
duced to  pay  the  money  by  fraud  and  mistake.  The  five  cases  were  tried 
together,  but  are  not  exactly  alike. 

In  the  first  action,  which  is  brought  by  the  Merchants'  lusMranco  Com- 
pany of  Providence,  11.  I.,  against  Charles  W.  Abbott  and  tlie  members  of 
the  firm  of  D.'imy,  Rice  it  Co.,  the  material  facts  are  Hhowu  by  the  report 
of  the  presiding*  justice  and  the  special  findings  of  the  jury  to    bo   as 

follows  :  — 

On  March  17,  187G,  a  woollen  mill  was  destroyed  by  firo,  upon  the  con- 


444       merchants'  insueance  co.  v.   abbott.    [chap,  il 

tents  of  which  Abbott  held  a  policy  of  insurance  from  the  plaintiffs  in  the 
sum  of  $2500,  payable  in  sixty  days  after  satisfactory  proofs  and  adjustment 
of  loss,  and  providing  that  any  fraud  or  false  swearing  in  the  proofs  of  loss 
should  avoid  the  policy.  Soon  after  the  fire,  Abbott  made  and  delivered 
to  the  plaintiffs  proofs  of  loss,  and  they,  after  a  reasonable  investigation, 
which  disclosed  no  grounds  for  a  refusal  to  pay,  and  in  ignorance  of  any 
fraud  on  Abbott's  part,  adjusted  the  amount  of  the  loss  in  accordance  with 
such  proofs. 

Denny,  Rice  &  Co.  offered  evidence  of  the  following  facts :  At  the  time 
of  the  fire  Abbott  was  indebted  to  them  in  the  sum  of  about  $4000.  la 
the  latter  part  of  April,  1876,  Abbott  paid  tliem  about  $1500  in  cash,  and, 
as  security  for  the  payment  of  the  rest  of  his  debt,  executed  an  instrument 
in  writing  under  seal,  by  which,  after  reciting  the  issuing  of  the  policy, 
and  that  a  claim  for  loss  had  arisen  under  it,  he  assigned  to  them  all  his 
"  claims  upon  said  insurance  company  for  loss  under  said  policy,"  and  au- 
thorized them  to  demand  and  sue  for  the  same  in  his  name,  if  necessary, 
and  the  proceeds  to  enjoy  to  their  own  use,  and  generally  to  do  all  and 
every  act  in  and  about  the  premises  which  he  might  do  if  this  assignment 
had  not  been  made. 

In  June,  1876,  at  the  expiration  of  the  sixty  days  allowed  by  the  terms 
of  the  policy,  the  plaintiffs,  in  good  faith,  and  not  knowing  of  any  fraud 
on  Abbott's  part,  paid  to  Denny,  Rice  k,  Co.  the  amount  of  the  loss  as 
adjusted,  and  took  a  receipt  signed  by  them  in  this  form  :  "Boston,  JMay 
25,  1876.  Received  of  the  Merchants'  Insurance  Company  of  Providence 
$2478.80  in  full  satisfiiction  and  discharge  of  all  claim  for  loss  and  damage 
under  this  policy  by  fire  March  1  7,  1876,  and  this  polic}'  is  herel)y  cancelled 
and  surrendered."  The  sum  so  paid  exactly  extinguished  the  debt  of  Abbott 
to  Dcnuy,  Rice  k  Co.,  and  they  never  paid  any  part  of  it  to  him. 

The  mill  and  its  contents,  as  the  jury  found,  were  burned  with  the 
knowledge  and  at  the  instigation  of  Abbott,  and  his  proofs  of  loss  were 
false  and  fraudulent.  The  plaintiffs  did  not  learn  that  they  had  been 
defrauded  until  May,  1877,  and  then  at  once  placed  the  case  in  the  hands 
of  legal  counsel  for  investigation,  and  for  prosecution,  if  investigation  should 
warrant  it ;  and  on  January  16,  1878,  brought  this  action.  The  other  de- 
fendants had  no  knowledge  of  any  fraud,  nor  was  an}'  demand  for  the  money 
made  upon  them  before  this  action  was  commenced. 

On  June  5,  1877,  Abbott  filed  a  petition  in  bankruptcy,  and  on  October  3, 
1877,  obtained  a  certificate  of  discharge,  and  no  dividend  was  paid  out  of 
his  estate. 

The  justice  presiding  at  the  trial  ruled  that  Abbott's  certificate  of  dis- 
charge w^as  no  bar  to  this  action  ;  and,  holding  that  the  facts  offered  to  be 
proved  by  the  other  defendants  constituted  no  defence,  directed  a  general 
verdict  for  the  plaintiffs,  and  reported  the  case  for  such  disposition  and 
judgment  as  the  full  court  should  determine. 


SECT.  I.]  merchants'   INSURANCE   CO.    V.    ABBOTT.  445 

There  can  be  no  doubt  of  the  liabihty  of  Abbott  in  this  action.  If  the 
money  had  been  paid  by  the  plaintiffs  to  him,  it  could  be  recovered  back 
as  money  paid  under  the  influence  of  a  mistake  between  them  and  him  as 
to  the  existence  of  a  state  of  facts  that  would  entitle  him  to  the  money.* 
Kelly  V.  Sulari;^  Townsend  v.  Crowdy;^  Pearson  v.  Lord  ;*  Stuart  v.  Sears;* 
Welch  V.  Goodwin/  2  Phil.  Ins.  §§  181G,  1817.  Although  Abbott  has 
not  in  fact  received  the  money,  the  payment  of  the  money  by  the  plaintiffs 
at  his  request  in  discharge  of  his  debt  to  the  other  defendants  is  equivalent 
to  the  receipt  by  Abbott  of  so  much  money,  and  is  sufficient  to  cnal>le  the 
plaintiffs  to  maintain  the  action  against  him  upon  the  special  coimt,  if  not 
upon  the  general  count  for  money  had  and  received.  Emerson  v.  H.iylies ;' 
Perry  v.  Swasey.®  This  liability  of  Abbott  to  the  plaintiffs,  beiuL'  a  debt 
created  by  his  own  fraud,  is  not  barred  by  his  certificate  of  discharge  in 
bankruptcy.  U.  S.  Rev.  Sts.  §  5117;  Turner  v.  Atwood;^  Mudge  v. 
Wilmot.i" 

As  to  the  other  defendants  a  different  question  is  presented.  If,  before 
receiving  the  money  from  the  plaintiffs,  they  had  known  the  true  state  of 
facts,  and  had  participated  in  Abbott's  fraud,  they  would  have  been  liable 
to  refund  the  money.  Martin  v.  Morgan  ; "  Ma.son  v.  Waite."  But  the 
report  states  that  there  was  no  evidence  offered,  nor  was  it  contended  at 
the  trial,  that  they  had  any  knowledge  of  the  fraudulent  conduct  of  Abbott, 
but  it  was  conceded  that  they  were  wholly  innocent  parties. 

As  to  them,  therefore,  assuming  the  truth  of  the  focts  which  they  offered 
to  prove,  the  case  stands  thus  :  They  held  a  valid  debt  against  Abbott.  The 
assignment  by  Abbott  to  them  was  made  in  consideration  of  that  debt,  and 
to  secure  the  payment  thereof.  The  previous  existence  of  the  debt  does  not 
make  the  assignment  the  less  a  conveyance  for  value.  Blanchard  v.  Stevens ;  ^^ 
Culver  V.  Benedict;"  Ives  v.  Farmers'  Bank  ;**  Railroad  Co.  v.  National 
Bank.^«  There  is  no  question  of  the  validity  or  of  the  genuineness  of  the 
assignment.  Having  been  made  after  the  fire,  and  after  the  amount  of  tho 
loss  had  been  adjusted  between  the  plaintiffs  and  Abbott,  it  was  in  legal 
effect  an  assignment  of  a  claim  of  Abbott  upon  the  plaintiffs  for  a  certain 
sum  of  money.  That  claim,  not  being  negotiable  in  form,  could  not  liavo 
been  sued  by  these  defendants  except  in  Al)b<>tt's  name,  and  subject  to  any 
defences  which  these  plaintiffs  had  against  hiiu.      But  tho  plaintitl's,  at 

1  Accordingly,  in  two  other  actions,  biour;lit  by  the  M:niufiictnioi-s'  Fiio  luid  Marino 
Insurance  Co.  and  tho  Anjerican  Iiismance  Co.,  respectively,  against  AltlM)tt  only,  to  ro- 
cover  back  money  paid  to  him  by  tho  pbuntifis  untler  the  ainiH  ciienmsfcinees  us  between 
tliem,  which  were  tried,  argned  and  determined  wifli  tlie  ensrs  in  tlie  text. 

Tfir  plaint ifTs  li'ii/  jii'fijiiirut. 

2  9  M.  &  W.  r,i.  8  8  r.  B.  N,  s.  477.  *  0  Mmss.  81.  »  1  ]<l  Muss.  It:}. 
8  123  Mass.  71.  ^  19  I'ick.  nC).  8  12  Cnsh.  3(J.  »  I'.'t  Muss.  411. 
w  124  Mass.  493,  and  103  U.  S.  217. 

"  3  Moore,  r,35  ;  h.c.  1  Biod.  &  B.  2«0  ;  How,  123.  "  17  Muss.  [,C,0. 

W  3  Gush.  I(i2.         »  13  Cray,  7.         "  2  Allen,  23C.  >«  102  U.  S.  14,  58,  59. 


446  merchants'  insurance  co.  v.  abbott.  [chap.  II. 

Abbott's  request,  and  without  any  suit,  paid  the  amount  of  the  loss,  as 
adjusted  between  themselves  and  Abbott,  directly  to  these  defendants,  who 
were  wholly  ignorant  and  innocent  of  the  fraud  of  Abbott. 

The  plaintiffs  do  not  stand  in  the  position  of  resisting  a  claim  of  Denny, 
Rice  &  Co.  on  an  alleged  promise  of  the  plaintiffs,  in  which  case  Denny, 
Piice  &  Co.  would  have  to  prove  a  valid  contract  of  the  plaintiff's  to  pay  to 
them  or  to  Abbott,  their  assignor.  But  the  plaintiffs  are  seeking  to  recover 
back  from  Denny,  Rice  &  Co.  a  sum  of  money  which  the  plaintiff's  have 
voluntarily  paid  to  them,  and  which  the  plaintiff's  assert  to  be  wrongfully 
withheld  from  them  by  these  defendants,  and  which  they  are  therefore 
bound  to  prove  that,  as  between  these  parties,  the  plaintiff's  have  the  better 
right  to,  and  it  is  inequitable  and  unjust  that  these  defendants  should 
retain. 

The  only  contract  of  the  plaintiff's  was  with  Abbott,  and  the  only  mistake 
was  as  between  them  and  him.  The  money  was  voluntarily  paid  by  the 
plaintiffs  in  discharge  of  Abbott's  supposed  claim  upon  them  under  their 
policy,  and  to  these  defendants  as  the  persons  designated  by  Abbott  to  receive 
it,  and  was  in  legal  eff"ect  a  payment  by  the  plaintiff's  to  Abbott.  These 
defendants  received  the  money,  not  in  satisfaction  of  any  promise  which 
the  plaintiff's  had  made  to  them  (for  the  plaintiffs  had  made  no  such 
promise),  but  under  the  agreement  of  Abbott  with  these  defendants  that 
they  might  receive  it  from  the  plaintiff's  and  apply  it  to  the  satisfaction  of 
Abbott's  debt  to  themselves.  In  other  words,  the  money  was  paid  by  the 
plaintiff's  to  these  defendants,  not  as  a  sura  which  the  latter  were  entitled 
to  recover  from  the  plaintiff's,  but  as  a  sum  which  the  plaintiff's  admitted 
to  be  due  to  Abbott,  under  their  own  contract  with  him,  and  which  at  his 
request  and  in  his  behalf  they  paid  to  these  defendants,  who  at  the  time 
of  receiving  it  knew  no  facts  tending  to  show  that  it  had  not  in  truth 
become  due  from  the  plaintiff's  to  Abbott.  This  payment  by  the  plaintiff's 
to  these  defendants  at  Abbott's  request  was  a  satisfaction  of  Abbott's  debt 
to  these  defendants,  and  might  have  been  so  pleaded  by  him  if  sued  by 
them  upon  that  debt.  Tuckerman  v.  Sleeper.^  As  between  the  plaintiff's 
and  these  defendants,  there  was  no  fraud,  concealment,  or  mistake.  These 
defendants  had  the  right  to  receive  from  Abbott  the  sum  which  was  paid  to 
them.  The  assignment  which  they  presented  to  the  phiintiff's  was  genuine, 
and  was  all  that  it  purported  to  be.  They  hold  the  money  honestly,  for 
value,  with  the  right  to  retain  it  as  their  own,  under  a  title  derived  from 
Abbott,  and  independent  of  the  fraud  practised  by  him  upon  the  plaintiffs. 

The  case  stands  just  as  if  the  money  had  been  paid  by  the  plaintiffs  to 
Abbott,  and  by  Abbott  to  these  defendants,  in  which  case  there  could  be 
no  doubt  that,  while  the  plaintiff's  could  recover  back  the  amount  from 
Abbott,  neither  Abbott  nor  the  plaintiffs  could  recover  the  amount  from 
these  defendants.     The  fact  that  the  money,  instead  of  beicg  paid  by  the 

1  9  Cush.  177. 


SECT.  I.]  merchants'   INSURANCE   CO.   V.   ABBOTT.  447 

pUiintiflFs  to  Abbott,  and  by  Abbott  to  these  defendants,  was  paid  directly 
by  the  plaintiffs  to  these  defendants,  does  not  make  any  diflerence  in  the 
rights  of  the  parties.  The  two  forms  do  not  differ  in  snbstance.  In  either 
case,  Abbott  alone  is  liable  to  the  plaintiffs,  and  these  defendants  hold  no 
money  which  ex  aquo  et  bono  they  are  bound  to  return  either  to  Abbott  or 
to  the  plaintiffs. 

The  case  does  not  differ  in  principle  from  one  in  which  B.,  having  made 
a  contract  for  the  sale  of  goods  in  his  possession  to  A.,  afterwards,  by  A.'s 
direction,  actually  delivers  them  to  C,  who  has  purchased  them  from  A,  in 
good  faith  for  a  valuable  consideration  as  between  A.  and  C,  the  nature  of 
which  is  known  to  B.,  and  B.,  upon  subsequently  discovering  that  the  sale 
from  himself  to  A.  was  procured  by  A.'s  fraud,  undertakes  to  recover  the 
goods  or  their  value  from  C. ;  or  from  a  case  in  which  a  bank,  having  at  the 
request  of  a  debtor  paid  money  to  his  creditor  upon  a  bond  or  a  check, 
under  the  mistaken  supposition  that  the  bond  is  secured  by  mortgage  of 
property  of  the  bank,  or  that  the  bank  has  funds  of  the  debtor  sufficient 
to  meet  the  check,  seeks  to  recover  back  the  money  so  paid. 

In  Aiken  v.  Short,^  the  action  was  brought  by  the  public  officer  of  a  bank 
against  an  executrix  to  recover  back  money  paid  to  her  under  the  following 
circumstances  :  George  Carter  had  made  to  the  defendant's  testator  a  bond 
secured  by  equitable  mortgage  on  property  devised  to  him  by  Edwin  Carter; 
and  had  afterwards  conveyed  the  same  property  to  the  bank,  the  latter 
agreeing  to  pay  the  bond.  The  defendant  applied  to  George  Carter  to  pay 
the  bond,  and  was  referred  by  him  to  the  bank,  which,  conceiving  that  the 
defendant  had  a  good  equitable  charge,  paid  the  debt  to  get  rid  of  the 
charge  affecting  its  own  interest.  By  the  discovery  of  a  later  will  of  Edwin 
Carter,  it  turned  out  that  George  Carter  had  no  title  to  the  property,  and 
consequently  that  the  defendant  had  no  title,  and  the  bank  had  noue.  It 
was  held  that  the  bank  could  not  recover  back  the  money  which  it  had 
paid  to  the  defendant. 

Chief  Baron  Pollock,  according  to  Hurlstone  and  Norman's  report,  after 
stating  the  facts  of  the  case,  said  :  "  The  bank  had  paid  the  money,  in  one 
sense,  without  any  consideration,  but  the  defendant  liad  a  perfect  right  to 
receive  the  money  from  Carter,  and  the  bankers  paid  for  him.  They  should 
have  taken  care  not  to  have  paid  over  the  money  to  get  a  valueless  security  ; 
but  the  defendant  has  nothing  to  do  with  their  mistake.  Supposo  it  was 
announced  that  there  was  to  be  a  dividend  on  the  estate  of  a  trader,  and 
persijns  to  wbom  he  was  indebted  went  to  an  c.ffice  and  received  instalmonta 
of  the  debts  due  to  them,  could  the  party  paying  recover  back  the  money 
if  it  turned  out  that  he  was  wrong  in  supposing  that  ho  had  fluids  in  hand  1 
The  money  was  in  fact  paid  by  the  bank  tw  the  agents  of  Carter."*  By  the 
similar  but  fuller  report  in  the  Law  Journal,  it  appears  that  the  ('miCK  Bakon. 
after  observing  that  the  bankers  "had  paid  the  money,  no  doubt,  in  ono 
1  1  II.  4i  X.  210  ;  s.  c.  25  L.  J.  (n.b.)  Ex.  321.  '^  1  U   &■  N.  211. 


418  merchants'   INSURAXCE   CO.   v.    ABBOTT.  [CHAP.  II. 

sense,  without  any  consideration,"  added,  "  What  is  that  to  the  defendant, 
who  received  it,  liaving  a  perfect  right  to  receive  his  [her]  money  from 
somebody,  that  is,  from  George  Carter]  And  I  think  the  bankers  must  he 
considered  rather  as  paying  it  for  George  Carter,  and  they  ought  to  have 
taken  care  that  they  did  not  pay  in  their  own  wrong  when  they  paid  it.  It 
appears  to  me  that  this  does  not  at  all  fall  within  any  case  whatever  decid- 
ing that  money  may  be  recovered  back  because  it  has  been  paid  under  a 

mistake."  ^ 

Barons  Platt,  Martin  and  Bramwell  w^ere  of  the  same  opinion.  Baron 
Platt  said,  "  The  action  for  money  had  and  received  lies  only  for  money 
which  the  defendant  ought  to  refund  ex  ceqm  et  bo?io;"  and,  after  stating 
the  other  facts,  said,  "  Carter  referred  her  to  the  bank,  who  paid  the  debt, 
and  the  bond  was  satisfied.  The  money  which  the  defendant  got  from  her 
debtor  was  actually  due  to  her,  and  there  can  be  no  obligation  to  refund 
it; "  2  or,  according  to  the  fuller  report,  "  He  refers  her  to  the  bank.  They, 
acting  as  his  agents,  upon  being  referred  to,  pay  his  debt.  How  can  that 
be  properly  recoverable  ^  Surely  the  debt  is  satisfied.  The  debt  was  due. 
It  is  not  as  though  there  were  no  debt  due,  and  there  was  a  mistake  of  fact ; 
but  here  the  debt  was  actually  due,  and  the  money  was  paid  to  satisfy 
that  debt.  It  appears  to  me  clear,  beyond  all  question,  that  this  money 
cannot  be  recovered  back."  ^  Baron  Martin  said,  "  The  case  comes  to 
this :  If  I  apply  to  a  man  for  payment  of  a  debt,  and  some  third  person 
pays  me,  can  he  recover  back  the  money  because  he  has  paid  it  under  some 
misapprehension  1 "  * 

In  Chambers  v.  Miller,^  the  plaintiff  presented  at  the  defendants'  bank 
a  check  drawn  on  them  by  a  customer,  and  received  the  money;  and  after 
he  had  counted  it  over  once,  and  while  he  was  recounting  it,  the  defendants, 
having  meanwhile  discovered  that  the  customer's  account  was  overdrawn, 
forcibly  detained  the  plaintiff,  compelled  him  to  give  up  the  money,  and 
returned  the  check  to  him  ;  and  he  brought  an  action  against  them  for 
assault  and  battery.  Chief  Justice  Erle  at  the  trial  ruled  that  the  property 
in  the  money  had  passed  to  the  plaintiff,  and  consequently  that  the  defend- 
ants' justifickion  failed;  and  his  ruling  was  confirmed  by  the  court  in  banc. 
The  question  whether  the  defendants  had  a  right  to  take  back  the  money 
by  force,  though  mentioned  by  some  of  the  judges,  was  not  reserved  or 
decided.     See  especially  32  L.  J.  (n.  s.)  C.  P.  31,  note. 

The  ground  assigned  for  the  decision  by  Chief  Justice  Erle  and  Mr.  Jus- 
dee  Williams  was,  that  the  monej^  having  heen  once  paid  by  the  bankers 
to  the  payee  of  the  check,  became  irrevocably  his,  and  they  could  not  have 
recovered  it  back  from  him  in  an  action  for  money  had  and  received,  because 
as  between  them  and  him  there  was  no  manner  of  mistake,  for  the  check 

1  25  L.  J.  (N.  s.)  Ex.  323.  2  i  n.  &  N.  214,  215. 

8  25  L.  J.  (X.  s.)  Ex.  324.  "  1  IT.  &  N.  213,  214. 

6  13  C.  B.  (.V.  s.)  125  ;  s.  c.  32  L.  J.  (N.  s.)  C.  P.  30. 


SECT.  I.]  merchants'    INSURANCE   CO.   V.    ABBOTT.  440 

^•as  genuine,  and  the  money  was  due  from  the  drawer  to  the  pavee,  and 
the  mistake  as  to  the  amount  of  the  drawer's  funds  in  the  hands  of  th<» 
bankers  was  a  mistake  between  him  and  them  only,  with  which  the  paje* 
had  nothing  to  do.  Tlie  Chief  Justice  distinguished  the  case  from  that  of 
Kelly  V.  Solari,  above  cited,  in  that  "  there  the  money  was  paid  to  a  party 
who  had  no  right  to  it  whatever,  and  the  mistake  was  between  tlie  parties 
themselves  as  to  the  money  being  due."  ^  The  like  distinction  was  taken 
in  Hull  V.  South  Carolina  Bank,^  and  in  Guild  v.  Baldridge." 

So  in  Pollard  v.  Bank  of  England,*  Lamhton  ct  Co.,  bankers,  under  the 
mistaken  belief  that  they  held  funds  of  the  acceptor  of  a  bill  of  exchange, 
paid  the  amount  of  the  bill  to  the  Bank  of  England,  which  had  discounted 
the  bill  for  the  drawer;  and  it  was  held,  in  a  considered  judgment  delivered 
by  Mv.  Justice  Blackburx,  in  behalf  of  himself  and  Chief  Justice  Cockburn 
and  Justices  Mellor  and  Lusrr,  that  Lambton  &  Co.  could  not  recover  back 
from  the  Bank  of  England  the  amount  so  paid,  and  that  the  Bank  of 
England  therefore  held  the  amount  on  the  drawer's  account. 

For  these  reasons,  the  court  is  of  opinion  that,  assuming  the  truth  of  the 
facts  of  which  evidence  was  introduced  by  the  defendants,  the  plaintiffs  may 
maintain  the  action  against  Abbott,  and  not  against  Deimy,  Bice  «fe  Co. 

In  any  view  of  the  case,  Denn}',  Eice  <fe  Co.  and  Abbott  cannot  be  jointly 
charged  in  this  action.  They  have  made  no  joint  contract  with  the  plain- 
tiffs, nor  have  they  jointly  received  money  from  the  plaintiffs.  The  grounds 
of  liability  of  the  two  are  distinct.  The  liability  of  Abltott  to  the  plaintiffs 
rests  upon  the  ground  that,  by  reason  of  his  fraud  and  their  mistake,  they 
have  at  his  request  paid  money  to  the  other  defendants  for  his  benefit;  and 
it  is  independent  of  the  question  of  the  amount  of  his  debt  to  the  other 
defendants.  The  liability  of  Denny,  Rice  &  Co.,  who  were  not  parties  to 
any  fraud  or  mistake,  can  rest  upon  no  other  ground  than  their  receipt  and 
retention  of  money  to  which  they  have  no  right,  and  which,  as  between 
them  and  the  plaintiffs,  justly  belongs  to  the  latter;  and  this  liability  can- 
not exist  unless  the  amount  of  the  debt  due  from  Abbott  to  them  is  less 
than  the  sum  of  money  which  they  have  received  from  the  plaintiffs.  The 
allegation  in  the  amended  declaration,  that  the  money  was  paid  l)y  the 
plaintiffs  for  the  joint  use  and  benefit  of  both  defendants,  is  therefore  un- 
supported by  the  evidence,  and  the  objection  on  the  ground  of  this  variance 
rni^dit  be  taken  by  the  defendants  at  the  trial.      Manahan  v.  dibbons.* 

'J'he  other  four  actions  arc  brought  against  Abb<itt  and  the  members  of 
the  firm  of  Browne,  Stecse  &  Clarke.  The  only  particulars  appearing  by 
the  report,  in  which  these  cases  differ  from  the  first,  are  that  the  cvidenco 
introduced  by  the  other  dt^fendants  tended  to  show  that  .Vblxitt's  debt  to 
them  was  in  part  for  money  advanced  by  them  to  him  after  the  fire ;  that 
each  of  the  assignments  executed  by  him  to  thctn  was  in  form  a  simplo 

I  32  L.  J.  (k.  8.)  r.  P.  33.  »  Du.U<7,  259,  2G2.         '  2  Swun,  2l»5,  303. 

*  L.  R.  6  Q.  B.  G23.  »  19  Johns.  109. 

29 


450        merchants'  insurance  co.  v.   abbott.     [chap.  II. 

assignment  of  all  his  "  right,  title,  and  interest  in  this  policy,  ana  all  benefit 
and  advantage  to  be  derived  therefrom ; "  and  that  in  the  fifth  case  Abbott 
signed  a  separate  receipt  shiiilar  to  that  signed  by  them,  and  the  check 
given  by  the  plaintiffs  was  payable  to  the  order  of  Abbott  and  the  other 
defendants. 

But  as  the  evidence  introduced,  as  stated  in  the  report,  showed  that  in 
all  these  four  cases  "the  amounts  due  on  the  policies  as  adjusted,  assigned 
to  them  as  aforesaid,  were  paid  to  Browne,  Steese  &  Clarke  by  the  insurance 
companies  at  the  expiration  of  the  sixty  days  allowed  by  the  terms  of  the 
policies,  and  the  money  kept  by  them,  and  no  part  of  it  paid  to  Abbott,"  a 
majority  of  the  court  is  of  opinion  that  neither  the  difference  in  the  form 
of  the  assignments  in  the  four  cases,  nor  that  in  the  form  of  the  receipts 
and  of  the  check  in  one  of  them,  can  affect  the  result ;  but  that  the  assign- 
ment in  each  case,  having  been  made  after  the  fire,  and  after  the  adjustment 
of  the  loss  as  between  the  company  and  Abbott,  was  in  legal  effect  not  an 
assignment  of  the  policy  as  an  existing  contract  of  indemnity  against  future 
contingencies,  but  only  an  assignment  of  a  claim  upon  the  company  for  an 
ascertained  sum  of  money ;  and  that  assuming  the  truth  of  the  facts  offered 
to  be  proved  by  the  defendants,  this  sum,  having  been  paid  by  the  company 
to  Browne,  Steese  &  Clarke,  without  any  fraud  or  mistake  as  between  them, 
and  not  exceeding  the  amount  of  the  demands  of  Browne,  Steese  <fe  Clarke 
against  Abbott,  cannot  be  recovered  back  from  them,  but  from  him  only. 

The  report  provides  that,  if  the  court  should  be  of  opinion  that  the 
plaintiffs  have  no  joint  cause  of  action  against  the  defendants,  they  may 
elect  which  of  the  defendants  they  will  discontinue  against,  and  such  farther 
proceedings  shall  thereupon  be  had  as  law  and  justice  may  require.  The 
other  defendants,  in  each  case,  contend  that,  as  Abbott  is  the  only  party 
whose  residence  or  place  of  business  is  in  the  county  of  Middlesex,  the 
other  defendants  residing  and  doing  business  in  Suffolk  and  the  plaintiffs 
being  a  foreign  corporation,  therefore,  if  the  plaintiffs  elect  to  discontinue 
against  Abbott,  the  defendants  should  be  entitled  to  the  same  right  to  move 
to  dismiss,  or  plead  in  abatement,  that  they  would  have  had  if  the  action 
had  originally  been  brought  against  them  alone,  and  they  propose  to  plead 
in  abatement  that,  as  between  them  and  the  plaintiffs,  the  action  is  brought 
in  the  wrong  county.  Gen.  Sts.  c.  123,  §  1.  But  the  action  was  rightly 
brought  in  the  county  in  which  one  of  the  defendants  resided,  and  the  case 
has  been  fully  tried  on  the  merits,  without  objection  being  taken  to  the 
venue  by  motion  to  dismiss  or  answer  in  abatement.  The  statutes  provide 
that  amendments  discontinuing  as  to  any  joint  planitiff  or  defendant  may 
be  allowed  at  any  time  before  final  judgment,  that  judgment  shall  not  be 
arrested  in  any  civil  action  by  reason  of  a  mistake  of  venue ;  and  that 
judgment  may  be  entered  against  such  defendants  as  are  found  on  the  trial 
to  be  liable  on  the  contract  declared  on,  notwithstanding  it  is  found  that 
all  the  defendants  are  not  jointly  liable  thereon.     Gen.  Sts.  c.  129,  §§  41, 


SECT.  I.]  STANDISH   V.   ROSS.  451 

79;  c.  146,  §  4 ;  c.  133,  §§  5,  6.  Aud  the  court  is  not  ousted  of  its  juris- 
diction of  a  transitory  action,  once  acquired  by  service  upon  a  defendant 
residing  in  the  county.  In-  a  faihire  to  recover  against  him  at  the  triah 
Lucas  V.  Nichols.^  The  plaintifts  are  therefore  entitled,  pursuant  to  tlie 
leave  reserved  in  the  report,  to  elect  to  prosecute  their  action  against  either 
defendant. 

Under  the  rulings  at  the  trial,  the  facts  which  the  evidence  introduced 
by  the  other  defendants  tended  to  show,  as  to  the  vaHdity  and  amount  of 
Abbott's  debts  to  them,  became  immaterial,  and  were  not  passed  upon  by 
the  jury,  and  the  plaintiffs  are  entitled,  if  they  so  elect,  to  a  new  trial  fur 
the  purpose  of  determining  these  facts.  If,  for  this  purpose,  they  elect 
further  to  prosecute  either  action  against  the  other  defendants,  they  must 
discontinue  against  Abbott ;  and  neither  the  question  of  Abbott's  fmud, 
which  has  been  fully  tried  and  settled  by  the  verdict,  nor  the  question  of 
the  other  defendants'  innocence  of  that  fraud,  which  was  conceded  at  the 
former  trial,  is  to  be  open  upon  the  new  trial.  Winn  v.  Columbian  Ins.  Co. ;  * 
Eobbins  v.  Townsend ;  *  Bardwell  v.  Conway  Ins.  Co.*  If,  on  the  other 
hand,  the  plaintiffs  elect  to  discontinue  against  the  other  defendants, 
judgment  must  be  entered  for  the  latter,  and 

Judgment  for  the  plaintiffs  against  Abbott  alone. 

The  cases  were  argued  in  February,  1879,  by  //.  W.  Suter  (F.  Dibney 
with  him),  for  Denny,  liice  &  Co.,  by  C.  R.  Train  and  E.  W.  Ilittchins,  for 
Browne,  Steese  &  Clarke,  and  by  J.  P.  Treadwell,  for  the  plaintills ;  and 
were  reargued  in  March,  1881,  by  F.  Dabney  (//.  W.  Sitter  with  him),  for 
Denny,  Rice  &  Co.,  by  A.  S.  Wheeler  and  E.  W.  I/i/tchins,  for  Browne,  Steese 
&  Clarke,  and  by  W.  G.  Eussell  and  J.  P.  Treadwell,  for  the  plaintills. 


(L)   Effect  of  Defendant's  Change  of  Position. 

STANDISII   V.  ROSS. 
Tn  the  P^xciiequer,  Febkuahv  IT),  1819. 

[Reported  in  3  Exchequer  Reports,  527.] 

Dedt  for  money  had  and  received.     Plea,  never  indebted. 

At  the  trial,  before  Hoi.fe,  B.,  at  the  Liverpool  Spring  Assizes,  1818,  it 

appeared  that  the  action  was  brought  by  the  plaintiff,  who  was  sherilf  of 

Lancashire  in    IHIO,  to  recover  money  ]m'n\  to  the  defendant  under  tlio 

following    circumstances:  —  The    defendant     having    recovered    judgment 

1  6  Gray,  309.  ^  12  rick.  279,  »  20  I'iik.  3i:i.  *  118  Ma-ss.  4C5, 


452  STANDISH   V.   KOSS.  [CHAP.  II. 

against  one  Hignett,  in  the  afternoon  of  Saturday,  the  25th  Apri],  1846, 
placed  in  the  sheriff's  hands  a  writ  o^  fieri  facias,  with  a  request  to  execute 
it  on  that  day  at  the  warehouse  of  Hignett  at  Manchester.  The  ofFicer  on 
going  there  found  the  warehouse  closed,  as  was  the  custom  in  Manchester 
on  a  Saturday  afternoon,  and  the  writ  remained  unexecuted  until  the  11th 
May,  when  the  officer  entered  and  seized  by  the  defendant's  order.  On  the 
same  day  the  sheriff  assigned  the  goods  seized  to  the  defendant  by  bill  of 
sale,  which  stated  the  consideration  to  be  the  sum  of  256^.,  paid  by  the 
defendant  to  the  sheriff.  A  return  of  fieri  feci  was  then  made.  Prior  to 
the  entry  and  seizure,  the  defendant's  attorney  had  notice  of  an  act  of 
bankruptcy  committed  by  Hignett  before  the  25th  April ;  upon  which  a 
fiat  issued  on  the  28th  August,  and  assignees  were  appointed.  The  as- 
signees brought  trover  against  the  sheriff  for  the  goods  seized,  when  he 
paid  their  value,  and  brought  the  present  action  to  recover  back  the  money 
so  paid.  It  was  submitted,  on  behalf  of  the  defendant,  that  the  action  was 
not  maintainable ;  and  the  learned  judge,  being  of  that  opinion,  nonsuited 
the  plaintiff,  reserving  leave  for  him  to  move  to  enter  a  verdict. 
A  rule  nisi  having  been  obtained  accordingly, 
Atherton  and  Unthanlc  showed  cause. 
Martin  and  /.  Addison,  in  support  of  the  rule. 
The  judgment  of  the  court  was  now  delivered  by 

Parke,  B.  This  case  was  argued  before  the  Lord  Chief  Barox  and  my 
Brothers  Rolfe  and  Alderson,  on  showing  cause  against  the  rule  to  enter 
the  verdict  for  the  plaintiff.  The  action  was  brought  by  the  plaintiff,  who 
•was  sheriff  of  Lancashire  in  1846,  against  the  defendant  for  money  had  and 
received  :  the  plea  was  the  general  issue.  The  defendant  was  a  judgment 
creditor  after  verdict  of  one  Hignett,  a  trader,  and  issued  a  fieri  facias 
against  his  effects,  which  was  put  into  the  sheriff's  hands  on  the  25th  of 
April,  1846.  The  sheriff  did  not  immediately  levy,  but  waited  until  the  11th 
May,  when  he  entered  and  seized  by  the  defendant's  order.  Prior  to  the 
entry  and  seizure,  on  that  day,  the  defendant's  attorney  had  notice  of  an 
act  of  bankruptcy  which  had  been  committed  by  Hignett  before  the  writ 
Avas  put  into  the  plaintiff's  hands  on  the  25th ;  and  a  fiat  was  duly  issued 
against  Hignett  in  the  month  of  August  following,  under  which  assignees 
were  chosen  at  a  meeting  which  was  then  held.  Long  prior  to  this  the 
plaintiff  had  sold  and  delivered  to  the  defendant  the  goods  for  256^.  by  a 
bill  of  sale  expressing  tliat  the  defendant  had  paid  that  sum.  The  plaintiff 
then  returned  to  the  fieri  facias  "fieri  feci."  The  assignees,  after  their  ap- 
pointment, sued  the  plaintiff  in  an  action  of  trover  for  the  goods  which 
"  were  seized  on  the  11th  INIay,  and  he  was  obliged  to  pay  them  3321.  The 
plaintiff  brought  the  action  afterwards  to  recover  from  the  defendant  256/., 
for  which  he  had  sold  the  goods  to  the  defendant.  INIy  Brother  Rolfe, 
having  directed  a  nonsuit,  reserved  liberty  to  move  to  enter  the  verdict  for 
that  sum. 


SECT.  I.]  STANDISH  V.   ROSS.  453 

The  case  was  fully  argued  before  us,  and  we  have  not  been  without  doubt 
on  the  question  submitted  to  us ;  but,  after  full  consideration,  we  think 
the  rule  must  be  made  absolute. 

Several  objections  were  taken  to  the  plaintiff's  right  to  recover.  One 
was,  that  no  money  was  paid  by  the  sheriff,  the  plaintilf,  to  the  defendant. 
But  although  no  money  in  fact  passed,  the  bill  of  sale  in  the  form  in  which 
it  was  drawn  shows,  as  between  the  plaintiff  and  the  defendant,  that  they 
were  in  the  same  situation  as  if  the  plaintilf  had  sold  to  the  defendant  and 
received  the  money ;  and  the  other  evidence  in  the  cjise  also  showed  that 
it  was  treated  as  paid  over  to  the  defendant.  Another  objection  was,  that 
the  money,  when  paid,  was  not  the  sheriff's  money ;  but  if  it  was  not,  the 
plaintiff  was  still  entitled  to  recover  back  that  money,  which  had  been  paid 
to  the  defendant  under  ignorance  of  matter  of  fact,  as  soon  as  he  had  been 
compelled  to  pay  for  the  goods  seized,  to  the  real  owner. 

Again,  it  was  objected,  that  the  sheriff  was  estopped  by  the  return  of 
fieri  feci.  The  case  of  Brydgcs  v.  Walford  decided,  that,  as  between  the 
same  parties,  it  was  no  absolute  estoppel  in  another  action  ;  and  though 
the  return  says  that  the  goods  were  then  the  goods  of  the  debtor,  that  did 
not  estop  the  sheriff  from  saying  that  the  then  title  of  the  debtor  was 
defeated  by  matter  subsequent.  Such  evidence  does  not  in  truth  contradict 
the  return. 

It  was  then  urged  (and  this  objection  was  one  which  seemed  at  first  to 
have  the  most  weight  in  it),  that  the  plaintilf  had  no  right  to  recover  back 
the  money,  as  he  could  not  ptit  the  defendant  in  statu  quo  ;  for,  in  the  first 
place,  if  the  sheriff  had  been  guilty  of  neglect  in  not  executing  the  process 
on  the  25th  of  April,  before  the  plaintilf  in  the  suit  had  notice,  the  plaintilf 
would  have  had  his  remedy  for  that  neglect,  and  that  remedy  was  suspended 
by  the  sheriff's  return  oi  fieri  feci ;  and  in  the  second  place,  the  plaintilf 
was  prevented  by  the  same  return  from  having  a  ca.  sa.,  by  which  he  might 
have  taken  the  body  of  the  bankrupt  in  executi(.n.  Wo  think  these  cir- 
cumstances make  no  difference  in  the  case.  "When  money  is  sought  to  bo 
recovered,  on  the  ground  that  the  consideration  stipidated  by  the  contract 
has  failed,  it  is  a  defence  that  the  plaintiff  has  had  the  consideration  in 
part,  and  that  the  parties  could  not  be  replaced  in  statu  quo.  'i'hat  is  the 
case  of  Hunt  v.  .Silk.'  Jiut  in  this  case  the  plaintiff's  claim  does  not  rest 
on  the  ground  that  the  money  has  been  so  paid  ;  it  is  for  nioney  paid,  not 
merely  by  mistake,  but  in  necessary  invincible  ignorance  of  matter  of  fact. 
The  plaintiff,  before  the  fiat  issued,  was  bound  to  pay  the  proceeds  of  tho 
execution  to  the  execution  jtlaintiff ;  lie  couM  not  ]K)ssibly  know  whetlier  a 
fiat,  which  would  defeat  the  title  of  tho  execution  defendant  to  the  goods, 
would  issue  or  not.  "When  the  fiia I  issued,  tho  title  of  tho  assignees  related 
back,  and  made  the  sheriff  a  wrongdoer  by  relation,  ami  ho  was  then  com- 
pellable to  make  good  the  loss  of  the  goods  to  their  true  owner;  and  thea 

»  5  KuHt,  419. 


454  POOLE Y   V.   BROWN.  [CHAP.  IL 

he  contends,  that  he  is  justly  entitled  to  recover  back  the  price  of  them, 
which  he  has  paid  to  the  execution  plaintiff.  This  he  cei'tainly  is,  as  was 
said  by  the  judges  in  Brydges  v.  Walford,  and  by  Lord  Ellenborough  in 
Wilson  V.  Milner,  unless  it  be  an  answer  that  the  plaintiff  cannot  be  put  in 
the  same  situation.  Does,  then,  this  circumstance  make  a  difference  1  It 
is  to  be  borne  in  mind  that  the  suspension  of  neither  remedy  was  caused 
by  any  neglect  or  misconduct  of  the  sheriff,  as  he  was  compellable  to  execute 
the  writ  when  it  was  executed,  and  to  make  the  return  which  was  made. 
The  remedy  itself,  by  action  against  the  sheriff  for  not  executing  the  writ, 
remains ;  it  is  in  respect  of  the  delay  of  the  remedy  only  that  the  defendant 
could  not  be  put  in  statu  quo.  We  think  these  circumstances  form  no 
impediment  to  the  right  to  recover,  if  money  were  paid  over  under  an 
ordinary  mistake  of  fact ;  it  could  not  be  any  bar  to  the  recovery  of  it, 
that  the  defendant  had  applied  the  money  in  the  mean  time  to  some  purchase 
which  he  otherwise  would  not  have  made,  and  so  could  not  be  placed  in 

statu  quo. 

Rule  absolute. 


POOLEY  V.  BROWN. 

In  the  Common  Pleas,  January  15,  1862. 

[Reported  in  11  Common  Bench  Reports,  New  Scries,  566.] 

This  was  an  action  for  money  had  and  received,  etc.  Plea,  never  in- 
debted. 

The  cause  was  tried  before  Erle,  C.  J.,  at  the  sittings  in  London,  after 
last  Trinity  term.  The  facts  which  appeared  in  evidence  were  as  fol- 
lows :  In  April,  1860,  one  Lindo  brought  to  the  plaintiff  eight  several 
bills  of  exchange,  amounting  together  to  the  sum  of  358/.,  which  purported 
to  be  drawn  by  one  Meyer  at  Brussels  upon  and  accepted  by  Messrs.  Gil- 
more  &  Co.  in  London,  and  to  be  indorsed  by  Meyer  in  Brussels,  and  asked 
him  to  discount  them  for  the  defendant,  but  without  recourse  to  him. 
The  plaintiff  consented  to  do  so,  and  accordingly  gave  the  defendant  a 
check  for  322/.  19.s.  4c?.  The  bills  had  affixed  on  them  adhesive  stamjjs 
pursuant  to  the  17  &  18  Vict.  c.  83,  s.  3,  but  it  did  not  at  the  time  occur 
to  either  of  the  parties  to  cancel  the  stamps,  as  required  by  s.  5. 

It  turned  out  that  the  name  of  Meyer  as  the  drawer  and  indorser  of 
these  bills  was  ff)rged.  Gilmore  &  Co.,  the  acceptors,  having  subsequently 
become  bankrupt,  the  plaintiff,  in  April,  18G1,  sought  to  prove  for  the 
amount  of  the  bills  against  their  estate  ;  when  it  was  discovered  that  the 
stamps  had  not  been  cancelled,  and  the  proof  was  rejected.  The  plaintiff 
then  demanded  back  the  sum  which  he  had  paid  the  defendant  for  the 
bills,  as  upon  a  failure  of  consideration. 


SECT.  L]  POOLEY  V.   BROWN.  455 

On  the  part  of  the  defendant,  it  was  objected,  that,  by  reason  of  the  non- 
compliance with  the  statute,  to  which  he  was  himself  a  party,  it  was  not 
competent  to  the  plaintiff  to  use  tlie  bills  as  evidenoo  ;  that  the  plaintiff, 
by  reason  of  his  own  laches,  whereby  he  had  materially  altered  the  posi- 
tion of  the  defendant,  had  disabled  himself  from  recovering  back  the 
money ;  and  that,  as  there  was  no  mistake  of  fact,  the  money  was  not 
recoverable  back. 

A  verdict  was  taken  for  the  plaintiff  for  322/.  19.?.  hi,  leave  being 
reserved  to  the  defendant  to  enter  a  nonsuit,  if  the  court  should  be  of 
opinion,  that  the  plaintiff  was  not  entitled  to  maintain  the  action. 

C.  irood,  in  Michaelmas  term  last,  accordingly  obtained  a  rule  nisi  to 
enter  a  nonsuit,  on  the  grounds, —  "  first,  that  the  bills  were  inadmissible 
in  evidence ;  secondly,  that  the  plaintiff  was  a  party  to  the  violation  of 
the  statute,  and  caused  his  own  loss ;  thirdly,  delay  in  applying  to  the 
defendant  for  payment ;  fourthly,  that,  if  any  mistake,  it  was  one  of  law, 
and  not  of  fact." 

J.  Brown,  with  whom  was  Hawkins,  Q.  C,  on  a  former  day  in  this  term 
showed  cause. 

Manisty,  Q.  C,  and  Wood,  in  support  of  the  rule. 

Erle,  C.  J.  This  was  a  rule  to  enter  a  verdict  for  the  defendant.  The 
facts  were,  that  the  plaintiff,  in  April,  1860,  bought  of  the  defendant  for 
323/.  certain  foreign  bills  of  exchange  purporting  to  be  drawn  by  Meyer,  in 
Brussels,  on  Gilmore  &  Co.,  of  London  :  the  defendant  omitted  to  cancel 
the  adhesive  stamp,  according  to  the  17  and  18  Vict.  c.  83,  s.  5,  when  he 
delivered  them  to  the  plaintiff  (the  cancellation  having  escaped  the  atten- 
tion of  each  party  at  the  time  of  the  sale).  Gilmore  k.  Co.  before  the  matur- 
ity of  the  bills  became  bankrupt.  In  April,  1801,  they  proposed  a  dividend  ; 
and  these  bills  were  tendered  for  proof,  but  rejected  because  the  stamp  was 
not  cancelled.  Then  the  plaintiff  demanded,  and  brought  this  action  for,  the 
sum  which  he  had  paid  to  the  defendant  for  the  bills,  on  the  gnmnd  that 
the  consideration  had  wholly  failed,  —  citing  Young  v.  Cole,'  where  the 
purchaser  of  Guatemala  bonds  was  held  entitled  to  rescind  the  purc-haso 
and  recover  back  the  price,  because  tliey  were  not  stamped  with  a  (Juate- 
mala  stamp,  and  Gurney  v.  Womersley,-  where  the  plaintitf  rescinded 
the  contract  and  recovered  the  purchase-money  paid  for  some  liills  which 
purported  to  be  accepted  by  one  Van  Notten,  but  which  (us  to  that  name) 
were  forgeries. 

In  answer  to  this  claim  of  tlie  plaintiff,  the  defendant  has  relied  on  two 
grounds,  —  first,  that  the  consideration  for  which  the  plaintiff  paid  his 
money  has  not  failed  ;  on  the  contrary,  the  specific  things  which  were  the 
subject  of  the  contract  of  sale  were  delivered  and  received,  viz.,  the  bills 
drawn  by  Meyer  it  Co.,  of  ISrussoIs,  on  Gilmore  it  Co.  of  London.  At  the 
time  of  the  contract,  they  had  all  the  ipialities  of  the  things  which  the 
1  3  N.  C.  724  ;  4  Scott,  489.  a  4  Ellis  &  B.  133. 


456  POOLEY   V.   BROWN.  [CHAP.  II. 

defendant  intended  to  sell  and  the  plaintiff  to  buy.     The  defect  arose  in 
the  process  of  delivery. 

When  fureij^  bills  sold  are  delivered,  the  Stamp  Act,  17  &  18  Vict. 
c.  83,  commands  the  seller  to  cancel  the  adhesive  stamp  before  he  delivers, 
and  the  buyer  to  se6  that  this  has  been  done  before  he  receives  them. 
Each  party  in  this  case  omitted  to  perform  the  duty  so  commanded  :  and 
the  statute  has  declared  the  consequences  which  are  to  follow  from  this 
inattention,  viz.,  the  seller  is  to  forfeit  50/.  to  the  Queen,  and  the  buyer 
is  to  lose  the  capacity  of  making  the  bills  available  for  any  purpose.  Al- 
though the  cancelling  is  required  from  the  seller,  the  seeding  that  it  has 
been  done  before  he  receives  it  is  required  from  the  buyer.  Each  of  the 
actors  has  his  duty  enforced  by  the  above-mentioned  consequences  from 
neglect ;  and  the  defendant  contended  upon  the  argument  before  us  that 
there  was  nothing  in  the  statute  which  laid  the  whole  of  the  loss  on  the 
seller. 

If  this  ground  failed,  then  the  second  ground  on  which  the  defendant 
relied  was,  the  time  that  had  elapsed  before  the  plaintiff  claimed  to  rescind 
the  contract  and  to  recover  back  the  purchase-money,  and  the  change  in  the 
circumstances  of  the  parties  during  that  time.  The  plaintiff  had  kept 
the  bills  for  a  year ;  the  defect  was  always  apparent  if  he  had  known  the 
law  ;  and  his  ignorance  of  the  law  would  be  no  excuse  for  his  omitting  to 
make  his  claim.  During  that  time  the  acceptors  had  become  bankrupt, 
and  the  drawer  had  not  been  made  to  pay ;  and  the  situation  of  the  defen- 
dant may  have  been  materially  altered  for  the  worse  by  the  delay ;  while 
the  plaintiff,  by  rescinding  the  conti-act,  would  gain  so  much  more  than  he 
would  have  got  with  a  valid  transfer,  as  the  price  he  paid  exceeds  the  divi- 
dend he  would  receive  under  the  bankruptcy.  If  any  action  lay,  it  would 
be  more  reasonable  to  sue  in  such  c;  se  for  the  true  loss  rather  than  for  the 
original  price  as  money  had  and  received. 

Under  these  circumstances,  we  are  all  of  opinion  that  the  plaintiff  had 
no  right  to  rescind  the  contract  of  sale,  and  that  the  defendant  is  entitled 
to  succeed  on  the  second  ground  above  mentioned. 

My  Brother  Keating  and  myself  are  also  of  opiuion  that  the  defendant  is 
entitled  to  succeed  on  the  first  ground  as  above  stated ;  but  from  this 
o])inion  my  Brother  Williams  dissents. 

Williams,  J.  I  agree  with  my  Lord  and  my  Brother  Keating  that  this 
rule  ought  to  be  made  absolute,  but  on  the  second  ground  only. 

If  the  plaintiff  had,  within  a  reasonable  time  after  he  had  received  the 
bills  from  the  defendant,  and  without  any  delay  prejudicial  to  the  latter, 
required  him  to  take  and  return  the  purchase-money,  on  the  gi'ound  that 
he  had  omitted  to  cancel  the  stamps,  I  think  the  plaintiff  might  have 
maintained  this  action,  because  I  think  there  was  an  implied  understand- 
ing when  the  bills  were  sold  they  were  to  be  not  merely  foreign  bills  of 
exchange,  but   negotiable   and   available    bills,   as   both   parties   believed 


SKCT.  I.]  rOOLEY   V.    BROWN.  457 

they  were,  and  they  have  turned  out  not  to  be  such  bills,  by  reason  of  the 
defendant's  neglecting  to  cancel  the  stamps  before  he  parted  with  the  bills, 
as  required  by  the  statute.  I  think,  therefore,  the  plaintiti'  would  have 
had  a  right  to  recover  back  the  purchase-money,  either  by  reason  of  the 
consideration  having  totally  failed,  or  by  reason  of  his  having  paid  it  in 
mistake  of  facts,  as  put  by  Lord  Campbell  in  Gompertz  v.  Bartlett.^  I  am 
strengthened  in  this  view  of  the  case  by  considering,  that,  if  the  vendee  of 
a  bill  sold  and  delivered  under  such  circumstances  could  be  compelled  to 
keep  it,  the  bill  must  by  the  terms  of  the  statute  he  wholly  unavailable  in 
his  hands  ;  whereas,  if  he  be  allowed  to  return  it  to  the  vendor,  the  latter 
may  at  all  events  sue  the  acceptor  on  it.  Some  doubt,  perhaps,  may  exist 
whether  he  could,  by  transferring  it  subsequently  to  another  vendee,  or 
another  holder  for  value,  render  it  available  in  the  hands  of  the  latter, 
because  the  statute  says  that  no  pei-sou  who  shall  take  such  a  bill  from 
another  shall  be  allowed  to  make  it  available,  unless  at  the  time  he  takes 
it  it  shall  bear  a  stamp  cancelled  in  the  manner  directed,  i.  e.  (as  it  might, 
perhaps,  be  contended),  cancelled  by  the  first  holder  before  he  has  de- 
livered the  bill  out  of  his  hands  to  any  one.  But  I  can  find  nothing  in  the 
Act  which  would  prevent  the  vendor,  though  he  may  have  transferred  the 
bill,  in  violation  of  the  statute,  without  cancelling  the  stamp,  from  after- 
wards .suing  the  acceptor  on  it,  if  the  bill  gets  back  to  his  (the  vendor's) 
hands. 

It  was  argued  on  behalf  of  the  defendants,  that  it  is  unjust  to  allow  the 
plaintitf  to  recover  back  the  whole  price  of  the  bills,  because  he  will  there- 
by be  put  into  a  better  plight  than  if  the  defendant  had  complied  with  the 
statute  ;  in  which  case  the  defendant  would  only  have  been  able  to  obtain 
a  dividend  under  the  acceptor's  bankruptcy.  But  the  answer  to  this  argu- 
ment is,  I  think,  that,  in  truth,  the  defendant  is  mei'cly  remitted  to  the 
condition  of  being  the  holder  of  the  bills  of  which,  by  reason  of  his  own 
neglect  to  cancel  the  stamps,  he  has  in  the  result  never  legally  ceased  to  be 
holder.  And  no  injustice  is  done  to  iiim  thereby,  if  he  is  so  remitted  with- 
out any  injurious  delay. 

In  the  present  case,  however,  T  agree  with  the  rest  of  the  court,  in 
thinking  that  the  action  is  not  maintainable,  because  the  vendee  of  the 
bills  neglected  for  an  unreasonable  time  to  return  them  to  the  vendor,  and 
must,  under  the  circumstances,  have  thereby  prejudiced  the  vendor  as  to 
his  position  in  respect  both  of  the  drawer  and  the  acceptors  of  the  bills. 

"VViLLKS,  J.  Not  having  heard  the  whole  of  the  argument,  I  take  no 
part  in  the  judgment  in  this  case. 

Rule  absolute. 

»  2  Ellis  k  H.  849. 


458  NEWAI-L   V.   TOMLINSON.  [CHAP.  IL 

NEWALL  AND  Another  v.  TOMLINSON  and  Another, 
In  the  Common  Pleas,  April  17,  1871. 
[Reported  in  Law  Rejjorts,  6  Common  Pleas,  405.] 

Action  for  money  had  and  received,  money  paid,  interest,  and  money 
found  due  upon  accounts  stated.     Plea,  never  indebted. 

The  particulars  of  demand  were  as  follows  :  — 

1870,  Dec.  14.  To  amount  of  overcharge  paid  by  the  plaintiffs  to  the 
defendants,  being  an  over-payment  on  invoice  for  289  bales  of  cotton  ex 
Glen  Cora,  dated  April  22d,  1870,  viz.  :  — 

Error  in    weight    of  74  bales  of  cotton,  said  to  weigh 

37,485  lbs.  net,  @  llif?.,  per  lb £1796     3     1 

Discount 26  18  10     £1764    4    0 

whereas  it  ought  to  have  been  26,685  lbs.     ll^d.  per  lb.      .   1278     9     8 
Discount 19     0     8 

1259     9     0 

509  15     0 
Interest  to  15th  of  December 15  17     2 

£525  12     2 

The  plaintiffs  seek  to  recover  the  sum  of  .525^.  12s.  2d.  as  the  difference 
due  to  them  on  the  above  account,  and  the  like  amount  on  accounts  stated. 

The  plaintiffs  also  claim  interest  on  509^.  15s.  (part  of  the  said  sum  of 
525^.  12s.  2d.)  from  the  15th  day  of  December,  1870,  till  payment  or 
judgment. 

The  cause  was  tried  before  Willes,  J.,  at  the  last  assizes  at  Liverpool. 
The  facts  were  as  follows :  The  plaintiffs  and  the  defendants  were  respec- 
tively cotton-brokers  in  Liverpool.  In  April,  1870,  the  plaintiffs  bought  of 
the  defendants  74  bales  of  cotton  ex  Glefi  Coin,  each  acting  for  principals 
whose  names  were  not  disclosed,  and,  according  to  the  usage  of  the  cotton- 
market,  each  treating  the  others  as  principals  in  the  transaction.  Weight- 
lists  of  the  cotton  were  in  the  ordin;  ry  coiu-se  delivered  to  each  party  from 
the  warehouse-keeper  at  Albert  Dock  ;  but  a  clerk  of  the  defendants  made 
a  mistake  of  100  cwt.  in  adding  up  the  figures,  and  the  consequence  was 
that  when  the  plaintiffs  paid  for  the  cotton  they  paid  the  defendants  too 
much  by  509/.  15s.  The  mistake  was  not  discovered  until  the  14th  of 
December,  when  the  plaintiffs  demanded  back  that  sum.  The  invoice  for 
the  cotton  (which  was  delivered  on  the  22d  of  April)  was  headed  as  fol- 
lows :  —  "  Messrs.  Newall  &  Clayton,  bought  from  W.  D.  Tomlinson  &  Co." 
etc. ;  and  it  was  not  until  after  the  discovery  of  the  mistake  that  the  plain- 
tiffs were  informed  (as  the  fact  was)  that  Messrs.  Dixon  <fe  Co.  were  the 
defendants'  principals. 


SECT.  I.]  NEW  ALL   V.    TOMLINSON.  459 

In  the  mean  time  the  defendants,  \Yho  had  previonsly  to  the  arrival  of 
the  cotton  advanced  very  considerable  snms  to  the  shippers,  Messrs.  Dixon 
&  Co.,  had  allowed  the  sum  in  question  in  their  account  with  them,  and 
had  subsequently  gone  on  making  further  advances  ;  and  when  Di.\on  ct  Co. 
nltimately  suspended  payment,  the  balance  due  from  them  to  the  defend- 
ants on  account  of  these  transactions  exceeded  2000/.  The  defendants 
thereupon  claimed  to  be  entitled  to  shelter  themselves  under  the  rule  of 
law  which  protects  payments  bona  fide  made  by  an  agent  to  his  principal, 
without  notice;  and  at  the  trial  it  was  submitted  on  their  behalf,  that, 
being  known  to  be  brokers,  and  being  under  advances  to  their  principals, 
whether  the  plaintiffs  knew  that  they  were  acting  for  principals  or  not, 
they  (the  defendants)  were  entitled  and  bound  to  hand  over  the  money  to 
their  principals,  or  (which  was  the  same  thing)  entitled  to  set  it  off  against 
their  advances,  and  having  done  so,  were  not  liable  to  be  called  upon  to 
refund  it :  and  the  cases  of  Holland  v.  Ptussell  ^  and  Shand  v.  Grant  *  were 
cited. 

The  learned  judge  in  his  summing-up  said  that  every  agent  for  the  sale 
of  goods  who  has  advanced  money  upon  them  and  has  them  in  his  posses- 
sion, has  a  right  to  sell  them  as  owner,  unless  there  be  a  countermand  of 
his  authority ;  and  he  distinguished  the  cases  cited,  on  the  ground  that  in 
both  of  them  the  persons  who  dealt  with  the  agent  knew  that  they  were 
dealing  with  one  who  represented  an  undisclosed  principal ;  whereas  here 
the  defendants,  though  general  brokers,  acted  in  the  particular  case  as 
principals,  and  he  directed  the  jury  to  find  for  the  plaintiffs,  damages 
509/.  15s.,  reserving  leave  to  the  defendants  to  move  to  enter  a  verdict  for 
them,  or  a  nonsuit,  if  the  court  should  think  the  ruling  wrong. 

Qu-ain,  Q.  C,  moved  accordingly. 

BoviLL,  C.J.  The  defendants  in  the  first  instance  personally  claimed 
the  price  of  the  cotton  from  the  plaintiffs  as  upon  a  sale  to  them  bv  the 
defendants,  each  being,  as  between  themselves,  ])ersonally  bound  as  princi- 
pals in  the  transaction,  though  each  were  acting  for  principals  whose  names 
were  not  disclosed.  The  invoice  was  made  out  as  upon  a  sale  from  the 
defendants  to  the  plaintiffs,  and  claiming  the  price  as  being  due  to  the 
defendants  personally  ;  and  each  were  liable  personally  to  the  others  for 
the  due  |)erformance  of  the  contract.  The  defendants  were  entitled  to  sue 
for  and  recover  the  price  of  the  cotton  in  their  own  names,  and  to  applv  it 
when  received  to  their  own  use  and  benefit.  They  iiad  made  large  advances 
to  their  principals,  Messrs.  Dixon  k  Co.,  upon  the  security  of  the  cotton, 
and  were  entitled  to  sell  it  to  recoup  themselves.  In  no  sense  could  they 
be  said  to  have  received  this  money  for  the  purpose  of  handing  it  over  to 
Me8.sr8.  Dixon  &  Co.  ;  nor  did  they  in  point  of  fact  hand  it  over  to  them. 
It  is  true  that  the  defendants  were  shown  to  have  made  fiirtlier  advances 

1  1  B.  &  S.  424;  30  L.  J.  Q.  W.  303:   iu  error,  4  B.  &  .S.  U;  32  \..  .1.  g.  B.  21)7. 

2  15  C.  B.  N.  B.  324. 


460  NEW  ALL   V.   TOMLINSON.  [CHAP.  II. 

to  Messrs.  Dixon  .t  Co.  subsequently  to  the  receipt  by  them  of  this  money. 
That,  however,  could  not  make  it  money  had  and  received  by  Messrs.  Dixon 
&  Co.  to  the  use  of  the  plaintiffs,  so  as  to  enable  them  to  sue  Messrs.  Dixon 
&  Co.  for  it.     The  mistake  originated  with  the  defendants  themselves,  and 
they  alone  are  responsible.     The  cases  relied  on  are  clearly  distinguishable. 
In  Shand  v.  Grant,^  the  defendant  received  the  money  as  agent  of  the  ship- 
owner, and  for  the  purpose  of  handing  it  over  to  him.     The  case  was  put 
entirely  upon  the  ground  that  the  defendant  was  a  mere  agent.     He  had 
handed  over  the  money  to  his  principal,  and  the  principal  was  the  proper 
person  to  sue.     So,  in  Holland  v.  Kussell,  the  same  view  was  taken,  and 
the  decision  proceeded  upon  the  ground  that  the  defendant  was  a  mere 
agent.     Cockburx,  C.  J.,  in  delivering  the  judgment  of  the  court  below, 
after  stating  what  had  been  the  contention  on  one  side  and  on  the  other, 
says  ^ :  "  We  are  of  opinion  that  the  plaintiff  fails  upon  the  facts.     Not 
only  is  it  clear  that  the  defendant  was  acting  solely  as  agent,  but  (the 
court  having  power  to  draw  inferences  of  fact)  we  are  of  opinion  that  the 
plaintiff  was  aware  that  the  defendant  was  acting  as  agent  for  the  foreign 
owners,  and  as  such  made  to  him  the  payment  of  the  money  he  now  seeks 
to  recover  back."     And,  when  the  case  came  before  the  Court  of  Error,  the 
same  view  was  taken.    Erle,  C.  J.,  delivering  the  judgment  of  that  court, 
says  *  :  "  The  defendant  who  received  this  money  from  the  plaintiff  received 
it  as  agent  for  a  foreign  principal.     The  plaintiff  knew  that,  and  paid  him 
in  that  capacity,  with  the   intention  that  he  should  pay  it  over  to  that 
principal,  and  he  did   so ;  and  all  the  money  thus  received  has  been  ac- 
counted for  in  a  settlement  of  account  approved  by  the  foreign  principal, 
under  circumstances  which  clearly  amount  to  payment  of  that  sum  to  him. 
The  defendant  having  therefore  been  altogether  an  agent  in  the  matter,  is 
there  anything  which  takes  him  out  of  the  ordinary  protection  to  which  an 
agent  is  entitled  who  pays  money  to  his  principal  before  he  received  notice 
not  to  pay  it,  and  before  he  knew  that  there  was  no  legal  duty  on  him  to 
do  so]     There  is  nothing  in  this  case  to  deprive  the  defendant  of  the  right 
of  an  ordinary  agent  so  to  protect  himself."     Here  the  defendants  were 
not  mere  agents.     They  were  dealing  as  principals,  and  entitled  to  apply 
the  proceeds  of  the  sale  of  the  cotton  to  their  own  use.     For  these  reasons 
I  am  of  opinion  that  the  direction  of  the  learned  judge  was  right,  and  that 
there  should  be  no  rule. 

Byles,  J.  I  entirely  agree  with  what  has  fallen  from  my  Lord  upon  the 
first  point.  The  defendants  did  not  receive  the  money  as  mere  agents : 
they  received  it  for  their  own  use  and  benefit.  In  addition,  I  would  ob- 
serve that  the  defendants  here  are  seeking  to  excuse  one  mistake  by  another. 
They  paid  over  (or  accounted  for)  the  money  to  their  employers,  if  not  with 

1  15  C.  B.  N.  s.  324. 

2  1  B.  &  S.  424,  at  p.  432;  30  L.  J.  Q.  B.  308,  at  p.  312. 
8  4  B.  &  S.  14,  at  p.  15  ;  32  L.  J.  Q.  B.  297,  at  p.  298. 


SECT.  I.]  NEWALL   V.    TO.MLINSON.  4G1 

recollection,  yet  with  notice  of  the  facts.  If  they  were  mere  agents,  they 
were  bound  to  remember.  On  both  grounds,  therefore,  I  think  the  verdict 
was  right. 

Montague  Smith,  J.  I  am  of  the  same  opinion.  Upon  the  facts  ap- 
pearing, the  defendants  were  not  mere  agents  to  receive  the  money  fur 
Dixon  <fe  Co.,  and  to  hand  it  over  to  them.  They  received  it  on  tlieir  own 
account,  and  had  a  right  so  to  receive  it  and  to  appropriate  it  to  their  own 
use.  They  were  not  mere  conduit-pipes  :  they  were  in  some  sense  principals, 
and  had  a  right  to  appropriate  the  money  in  satisfaction  of  their  advances 
to  Dixon  i:  Co.,  and  they  did  so.  What  is  said  by  Lord  Mansfiklh  in  liuller 
V.  Harrison^  seems  to  me  to  be  very  much  in  point  :  "The  law,'  he  says, 
"is  clear,  that,  if  an  agent  pay  over  money  which  has  been  paid  to  him  by 
mistake,  he  does  no  wrong;  and  the  plaintiti'  must  call  on  tlio  principal: 

and  in  the  case  of  Muilman  v. ,  where  it  appeared  that  the  money 

was  paid  over,  the  plaintiff  was  nonsuited.  Eut,  on  the  other  hand,  shall 
a  man,  though  innocent,  gain  by  a  mistake,  or  be  in  a  better  situation  than 
if  the  mistake  had  not  happened  ?  Certainly  not."  If  the  argument  of 
Mr.  Quain  were  to  prevail,  the  defendants  clearly  would  be  in  a  better  posi- 
tion than  if  the  mistake  had  not  happened.  They  received  the  money  and 
appropriated  it  towards  satisfaction  of  their  own  debt.  I  think  the  defend- 
ants were  not,  to  use  the  words  of  Erle,  C.  J.,  in  Holland  v.  Russell,^  agents 
altogether.     As  between  themselves  and  the  plaintiffs,  they  were  principals. 

Brett,  J.  I  am  of  the  same  opinion.  The  defendants  were  originally 
liable  because  under  a  mistake  they  received  money  which  they  were  not 
entitled  to.  They  cannot  get  rid  of  that  liability,  unless  they  bring  them- 
selves within  the  rule  as  to  an  agent  who  has  received  money  on  account  of 
his  principal  and  has  paid  it  over  to  him.  It  seems  to  me  that  they  have 
failed  to  bring  themselves  within  that  rule.  They  did  not  receive  this 
money  for  their  principals.  They  stood  with  regard  to  the  plaintifTs  as 
ori"-inal  contractors.  I  should  be  sorry,  however,  to  decide  the  case  on 
that  ground  alone.  The  money  in  question  was  received  by  the  defcntlants, 
not  only  as  between  the  plaintiffs  and  themselves,  but  also  as  between  Dixon 
&  Co.  and  themselves,  on  their  own  account,  and  not  on  account  of  Dixon  & 
Co.  Being  under  advances,  they  had  a  right  to  sell  tho  cotton  and  n^ceivo 
the  proceeds  on  their  own  account.  They  cannot,  therefore,  say  that  they 
received  the  509Z.  15s,  in  question  to  the  use  of  their  principals;  and  con- 
sequently they  do  not  bring  themselves  within  the  ndc  relied  on.  I  will 
only  add  that  I  found  my  judgment  entirely  tipon  that  view,  ami  I  do  not 
rely  on  the  ground  that  the  money  was  received  by  tho  defendants  through 

a  mistake  of  their  own. 

liule  re/tued. 

1  2  Cowp.  568.  M  B.  &  S.  16. 


462  DURRANT  V.  THE   ECCLESIASTICAL   COMMISSIONERS.      [CHAP.  IL 


DURRANT  V.   THE  ECCLESIASTICAL  COMMISSIONERS   FOR 
ENGLAND   AND   WALES. 

In  the  Queen's  Bench  Division,  November  16,  1880. 

[Reported  in  Law  Reports,  6  Queens  Bench  Division,  234.  ] 

Special  case,  stated  by  way  of  appeal  from  the  judgment  of  the  judge 
of  the  county  court  of  Downham  in  favor  of  the  plaintiff,  in  an  action 
brought  to  recover  back  an  amount  of  tithe  commutation  rent-charge  paid 
to  the  defendants  as  rectors  of  the  rectory  of  Crimplesham,  under  a  mistake 
of  fact. 

The  material  facts  appearing  in  the  case  were  the  following  :  — 

Prior  to  Michaelmas,  1870,  certain  lands  in  the  parish  of  Crimplesham, 
in  Norfolk,  were  held  by  a  Mr.  Hodgkinson  as  tenant.  At  Michaelmas, 
1870,  the  plaintiff  succeeded  Hodgkinson  in  his  tenancy,  except  as  to  a  part 
of  the  land  called  Stanks,  consisting  of  about  twenty-five  acres,  which  was 
cut  off  and  thenceforward  held  separately.  The  action  was  brought  to 
recover  back  tithe  which  accrued  due  between  the  10th  of  April,  1874,  and 
the  first  of  October,  1876,  in  respect  of  Stanks,  and  was  paid  by  the 
plaintiff  to  the  defendants. 

The  defendants  became  owners  in  possession  of  the  tithe  of  the  parish  of 
Crimplesham  on  the  10th  of  April,  1874.  The  names  of  the  persons  for  the 
time  being  occupying  the  respective  hereditaments  subject  to  tithe  were 
put  down  in  the  collecting  book  of  the  tithe-owner's  agent,  which  was  used 
by  the  collector  at  the  tithe  audit.  When  Hodgkinson  gave  up  his  ten- 
ancy the  name  of  the  plaintiff  was  substituted  in  the  collecting  book  of  the 
then  collector  for  that  of  Hodgkinson  in  respect  of  all  the  lands,  including 
Stanks.  From  that  time  until  April,  1874,  the  collector  for  the  lessees, 
and  afterwards  the  collector  for  the  defendants,  gave  notices  to  the  plain- 
tiff, as  an  occupier  of  lands  in  the  parish,  to  pay  the  tithe  for  the  lands 
that  appeared  by  the  collecting  book  to  be  occupied  by  him,  without  any 
knowledge  on  his  or  their  part  that  the  plaintiff  did  not  occupy  the  laud 
called  Stanks,  or  that  the  plaintiff  was  not  liable  to  pay  tithe  for  the  same, 
being  guided  simply  in  the  notices  of  audit  by  the  list  above  mentioned. 

The  plaintifT  paid  his  tithe  according  to  the  notices,  in  ignorance  that  the 
amount  specified  in  the  notices  included  the  tithe  for  Stanks  not  occupied 
by  him.  The  tenant  of  Stanks,  who  was  liable  under  an  agreement  with 
the  landlord  to  pay  tithe,  was  not  asked  to  pay  for  that  land  until  after 
the  plaintiff,  in  April,  1877,  accidentally  discovered  that  he  was  paying 
tithe  for  land  not  in  his  possession,  and  refused  to  pay  it  any  more. 


SECT.  I.]  THE   KINGSTON   BANK   V.    ELTINGE.  4G3 

The  question  for  the  opinion  of  tlie  court  was  whether,  under  these  cir- 
cumstances, the  phiintiff  was  entitled  to  recover  back  any  and  what  part  of 
the  tithe  so  paid  by  him  to  the  defendants? 

F.  M.  White,  Q.  C.  and  J.  M.  Lloyd,  for  the  defendants. 

Pollock,  B.  I  agree  in  the  decision  arrived  at  by  the  county  cotirt 
judge  in  favor  of  the  plaintiff.  If  the  mistake,  wiiich  was  common  to  both 
parties,  had  been  discovered  within  a  certain  time  after  the  payment  the 
defendants  could  have  obtained  the  tithe  from  the  tenant.  The  fact  that 
the  mistake  was  not  discovered  in  time  prevents  this,  and  so  alters  the 
position  of  the  defendants  ;  but  there  is  no  conduct  on  the  part  of  tliC 
plaintiff  such  as  would  disentitle  him  from  recovering  in  tliis  action.  lu 
Cocks  V.  Mastcrman^  the  ground  of  the  decision  was  that  the  banker  should 
bear  the  loss,  because  he  had  not  done  that  which  bankers  are  bound  to 
do,  given  notice  of  the  forgery  of  the  cheque  when  it  became  due.  This 
and  other  similar  cases  proceed  upon  the  ground  of  some  mutual  relation 
between  the  parties  creating  a  duty  on  the  part  of  the  plaintiff,  breach  of 
which  disentitles  him  from  recovering.  Xo  such  state  of  facts  exists  here, 
and  the  plaintiff,  having  paid  the  money  under  a  mistake  of  fact,  is 
entitled  to  recover  it  back. 

Hawkins,  J.,  concurred.  Judgment  for  the  plaintiff. 


THE  KIXGSTOX  BANK,  Appellant,  v.  ROELTFF   ELTIXOE,  Bresi- 

DEXT     OF     THE     HUGUEXOT    BaNK    OF    XeW    PaLTZ,    UesPONDENT. 

In  the  Court  of  Appeals  of  Xew  York,  June  11,  1869. 

[Reported  in  40  New  York  Reports,  301.] 

Appeal  from  a  judgment  of  the  General  Term  of  the  thin!  district, 
affirmin"  a  judgment  for  the  defendant  entered  upon  the  decision  of  the 
court,  on  a  trial  without  a  jury. 

The  action  was  for  money  paid  under  a  mistake  of  fact. 

The  following  arc  the  facts  as  found  by  the  judge  :  — 

On  the  30th  of  January,  1854,  the  Huguenot  Bank  duly  recovered  three 
several  judgments  in  the  Sui)reme  Court,  viz.  :  One  against  Nicholas  Klmeu- 
dorf,  William  Mastoii,  and  Marius  Schoomnakcr,  f.n*  .?2t'):»'.).'_»l)  ;  one  against 
N.  Elmondorf  and  M.  Schoonmakcr,  SlT.GI.OO;  and  the  other  against 
Nicholas  Klmendorf  alone,  SlO.'U.r.'J  ;  amounting  in  all  to  $r,:}r)1.9S  ; 
which  judgments  were  duly  docketed  in  I'lster  coimty  clerk's  oflice  on  tho 
same  day,  and  executions  issued  thereon  and  delivered  to  the  shrriff  of 
said  county  on  the  said  30th  of  January,  1854,  at  1  o'ch.ck,  p.m. 

1  9  U.  ic  C.  902. 


464  THE   KINGSTON   BANK   V.    ELTINGE.  [CIIAP.  II. 

Nicholas  Elmendorf  was  the  owner  of  a  steamboat  called  the  Alida, 
worth  $19,000;  and  of  other  personal  property  worth  $1143.99;  also  of 
real  estate  in  said  county  worth  $18,147.88,  and  the  judgment  debtor, 
Wra.  Masten,  owned  a  propeller  worth  $1000. 

No  liens  or  incumbrances  then  existed  against  the  said  property  of  the 
judgment  debtors,  excepting  four  judgments  docketed  in  said  clerk's  office, 
viz  :  ha  favor  of  other  parties  against  said  Elmendorf  and  others,  amounting 
in  the  aggregate  to  about  $10,000  ;  on  which  no  executions  had  then  been 
issued  to  the  sheriff.  Before  the  executions  had  run  out  on  the  said  judg- 
ments in  favor  of  the  Huguenot  Bank  in  the  sheriffs  hands,  the  real  and 
personal  property  of  the  judgment  debtor,  Elmendorf,  was  amply  sufficient 
to  pay  said  judgments  and  all  prior  liens. 

Subsequently  and  prior  to  March  28,  1854,  other  ji;dgments  in  favor  of 
various  parties  were  recovered  against  EliTiendorf,  and  on  the  25th  of 
T>rarch,  1854,  the  Kingston  Bank  recovered  three  several  judgments  against 
Elmendorf,  Lockwood,  and  Schoonmaker,  amounting  in  the  aggregate  to 
about  $15,000,  and  thereafter  judgments  to  a  large  amount  were  perfected 
by  various  parties  against  Elmendorf. 

The  sheriff  levied  on  the  Alida  between  the  first  and  the  middle  of  jNIay, 
1854,  and  on  the  propeller,  the  property  of  William  Masten,  the  middle  of 
March,  1854. 

On  the  17tli  of  July,  1854,  the  steamboat  Alida,  the  property  of  Elmen- 
dorf, was  sold  by  the  sheriff  for  $19,000  (and  the  propeller  was  sold  at  the 
same  time  for  $1000),  to  John  Van  Vechten,  for  which  sum  of  $19,000, 
Van  Vechten,  by  the  consent  of  the  Kingston  Bank,  gave  his  note  to 
the  sheriff. 

The  real  estate  of  Elmendorf  was  sold  by  the  sheriff,  under  executions, 
April  10,  1855,  and  brought  $18,171.88. 

On  the  20th  day  of  July,  1854,  Van  Vechten  paid  all  the  judgments  in 
favor  of  the  defendant,  the  Huguenot  Bank,  and  the  same  were  at  his 
request  then  satisfied  and  cancelled  of  record  ;  these  judgments  were  paid 
and  cancelled  of  recoi-d  by  the  consent  of  the  Kingston  Bank. 

These  payments  were  made  from  the  proceeds  of  the  sale  of  the  Alida, 
imder  the  mistake  of  fact  that  the  Alida  had  been  levied  upon  under  the 
executions  upon  the  defendant's  judgments,  whereas  no  such  levy  had  been 
made ;  but  those  executions  had  run  out  in  the  sheriff's  hands  prior  to  any 
levy  on  the  Alida.  They  were  so  paid  without  any  fault  or  want  of  care  of 
the  defendant,  and  without  the  defendant's  obtaining  any  advantage  thereby, 
as  the  judgments  of  the  defendant  were  entirely  safe  and  secure  by  the  real 
estate  of  Elmendorf,  on  which  they  were  a  lien  prior  to  plaintiff's  judg- 
ments, but  by  being  satisfied  by  the  payments  before  mentioned,  the  de- 
fendant's lien  on  the  real  estate  was  lost  without  fault  of  the  defendant, 
and  if  this  plaintiff  recover,  the  defendant  will  probably  lose  its  judgments. 
There  was  no  fraud  in  the  conduct  of  the  plaintiff  or  the  defendant,  but  the 


SECT.  I.]  THE    KINGSTON    BANK    V.    ELTINGE.  4G5 

plaintiff  had  the  mcaus  of  easily  ascertaining  the  facts  as  to  the  levy  prior 
to  the  payment  of  defendant's  jndgments. 

As  a  conclnsion  of  law,  he  found  that  the  plaintiftMiad  no  cause  of  action. 

The  judgment  was  affirmed  by  the  General  Term. 

Sanuiel  Hand  for  the  appellant. 

Jacob  I.  Ilardenhurg  for  the  respondent. 

HuxT,  Chief  Justice.  The  judgment  in  this  case  was  rendered  upon  a 
finding  of  facts  by  the  judge  who  tried  the  cause,  without  a  jury.  This 
judgment  was  affirmed  by  the  General  Term.  In  such  case  the  Code  pro- 
vides, that  the  findings  of  fact  are  conclusive  upon  us.  Both  parties  in  their 
briefs  proceed  upon  the  basis  of  the  facts  thus  found,  and  the  respondent 
expressly  states,  that  the  findings  of  the  judge  are  fully  sustained  by  the 
testimony.  It  is  not  competent,  therefore,  for  the  respondent  to  insist,  as 
he  does  in  his  second  point,  that  "  no  part  of  the  moneys  paid  to  the 
Huguenot  Bank  were  moneys  realized  out  of  the  sale  of  the  Alida.  It 
■was  all  money  of  N.  Elmendorf,  the  principal  debtor,  and  upon  it  the 
Kingston  Bank  had  no  lien  or  claim  whatever."  The  judge  trying  the 
cause  has  found,  that  "the  judgments  of  the  defendants  were  paid  from 
the  proceeds  of  the  sale  of  the  Alida,  under  the  mistake  of  fact  that  the 
Alida  had  been  levied  upon  under  the  executions  of  the  defendants'  judg- 
ments, whereas  no  such  levy  had  been  made."  This  finding,  as  the  respondent 
admits,  and  it  cannot  be  denied,  is  sustained  by  the  evidence.  As  a  fact  it 
is  conclusive  upon  us  here.  The  case,  then,  stands  thus.  The  defendants, 
having  the  earliest  judgments  against  Nicholas  Elcmendorf  and  others, 
issued  three  executions  upon  their  judgments  in  January,  1851.  In 
March,  1854,  the  judgments  in  favor  of  the  plaintiffs  were  recovered,  and 
executions  issued  upon  them  to  the  sheriff  holding  the  prior  executions. 
During  the  life  of  the  latter  executions,  but  after  the  lien  of  the  former 
had  expired,  by  lapse  of  time,  the  steamboat  Alida  was  levied  upon,  under 
the  executions  in  the  sheriff's  hands,  and  sold  for  819,000.  Both  parties 
supposed  that  the  boat  had  been  levied  upon  by  the  first  executions,  as  well 
as  by  the  later  ones  ;  the  purchaser  paid  the  first  executions  and  the  judg- 
ments were  satisfied  of  record.  This  was  done  by  the  consent  of  tlie  plain- 
tiffs. The  plaintiffs'  executions,  in  consequence  thereof,  remained  unpaid. 
Upon  discovering  the  error,  to  wit,  that  the  first  executions  liad  expired, 
and  were  not  a  lien  upon  the  boat  or  its  proceeds,  tlio  plaintiff  demands  of 
the  defendant  the  money  thus  erroneously  paid,  and  brings  this  action  for 
its  recovery. 

Tlie  money  thus  received  by  the  defendant  was  the  plaintiffs'  money. 
That  it  did  not  belong  "to  the  defendant  follows  necessarily.  The  avails 
of  the  property  of  a  judgment  debtor,  when  sold  upon  execution,  are  by 
law  to  be  paid  to  the  creditors  upon  whose  execution  it  is  sold.  'I'lirir 
judgments  and  executions  are  thereby  satisfied  and  discharged.  Such  pro- 
ceeds, on  the  other  hand,  do  not  belong  to  a  judgment  creditor,  whoso  cxo- 

80 


466  THE   KINGSTON   BANK   V.   ELTINGE.  [CHAP,  II. 

cution  has  expired  by  lapse  of  time,  and  is  not,  thei'efore,  a  lien  upon  the 
property.  Neither  is  such  judgment  impaired  or  affected  by  such  sale. 
It  may  be  immediately  enforced  by  another  execution  upon  any  property, 
real  or  personal,  that  the  debtor  may  possess.  Gardinier  v.  Tubbs ;  ^ 
McChain  v.  Duffy  ;  ^  Van  Winkle  v.  Udall ;  ^  People  v.  Hopson ;  *  Ostran- 
der  V.  Walter.^ 

The  defendants  have  received  the  money  which  should  have  been  paid 
to  the  plaintiffs,  by  their  assent,  it  is  true,  but  which  assent  was  based 
upon  a  mistake  of  fact.  The  principles  of  law  will  not  permit  the  defend- 
ants to  retain  this  money,  unless  there  is  something  in  the  case  to  take  it 
out  of  the  general  rule.  The  authorities  to  this  point  are  numerous. 
Barr  ?'.  Veeder ;  ^  Wheadon  v.  Olds;''  The  Bank  of  Utica  v.  Van  Gieson;' 
Canal  Bank  v.  Bank  of  Albany  ;^  Bank  of  Commerce  v.  Union  Bank.^" 

So  far  as  can  be  gathered  from  the  statements  of  the  judge  trying  the 
cause,  and  the  opinion  of  the  court  below,  their  judgment  in  favor  of  the 
defendants  was  based,  first,  upon  the  idea  that,  by  the  exercise  of  proper 
diligence,  the  plaintiffs  might  have  learned  that  the  defendants'  executions 
had  expired,  and  thus  have  avoided  the  error ;  and  second,  that  by  the 
discharge  of  their  judgments,  the  defendants  had  lost  their  hen  upon  the 
real  estate  of  their  judgmpuf-  debtor,  and  if  compelled  to  refund,  would  in 
fact  lose  their  debt.     I  will  consider  each  of  these  positions. 

As  to  the  first  proposition,  that  the  plaintiff  had  the  means  of  learning 
the  true  state  of  the  case.  It  cannot  be  denied  that  either  party  might 
have  made  inquiry,  and  would  probably  have  learned  the  actual  facts. 
There  is  no  reason  to  suppose  that  the  sheriff  would  have  refused  an  ex- 
planation of  the  order  and  lien  of  the  executions  in  his  hands,  if  he  had 
been  called  upon  for  that  purpose.  This  course,  however,  was  open  to 
either  party,  and  there  is  no  more  negligence  in  failing  to  obtain  the 
knowledge,  by  one  party,  than  the  other.  The  defendants  were  equally 
bound  with  the  plaintiffs  to  possess  the  knowledge,  and  if  the  want  of  it  is 
a  ground  of  complaint,  are  equally  censurable  with  the  plaintiffs  for  not 
possessing  it.  In  The  Canal  Bank  v.  The  Bank  of  Albany  ®  the  court  say  : 
"The  conduct  of  both  parties  was  bona  fide,  and  the  negligence  or  rather 
misfortune  of  both  the  same.  It  was  the  duty,  or  more  properly,  a 
measure  of  prudence  in  each  to  have  inquired  into  the  forgery,  which  both 
omitted.  But  this  raises  no  preference  at  law  or  equity  in  favor  of  the 
defendants,  but  against  them.  They  have  obtained  the  plaintiffs'  money 
without  consideration,  not  as  a  gift,  but  under  a  mistake.  For  the  very 
reason  that  the  parties  are  equally  innocent,  the  plaintiffs  have  the  right  to 


1  21  Wend.  169,  171.  ^  2  Duer,  645.  8  j  Hill,  559. 

*  1  Denio,  574.  ^  2  Hill,  329.  «  3  Wend.  412. 

7  20  Wend.  174.  8  13  Johns.  485.  9  1  Hill,  287. 
10  3  Comst.  237. 


SECT.  L]  the    KINGSTON    BANK   V.    ELTINGE.  4G7 

recover."     (Page    290.)     The    same  rule    is  laid  down   in  The   Bank   of 
Commerce  v.  The  Uuiou  Laiik.^ 

Care  and  diligence  are  not  controlling  elements  in  the  case.  It  is  a 
question  of  fiict  merely.  The  inquiry  is,  are  the  parties  mutually  in  error, 
and  did  they  act  upon  such  mutual  mistake,  not  whether  they  ought  so 
to  have  acted.  If,  in  consequence  of  such  mutual  mistake,  one  party  has 
received  the  property  of  the  other,  he  must  refund,  and  this  without  reference 
to  vigilance  or  negligence.  On  a  sale  and  purchase  of  real  estate,  the  rule 
and  the  principle  are  different.  It  is  a  case  of  a  bargain  in  which  the  law 
requires  the  exercise  of  care  and  attention.  A  party  cannot  then  ullege 
himself  to  be  ignorant  of  a  fact,  of  which  he  was  put  upon  the  inquiry,  and 
of  which  he  could  have  obtained  a  knowledge  by  reasonable  diligence.  In 
cases  of  bargains  and  sales,  the  rule  is  applicable.  vijUantihus  non  dormieii- 
tihus  leges  subveniunt.  Such  was  the  case  cited  of  Taylor  v.  Fleet '  and  of 
which  there  are  many  instances  in  the  books.  But  where  there  is  no 
matter  of  contract,  no  bargain  or  sale,  there  is  no  call  for  the  exorcise  of 
astuteness.  The  case  then  becomes  one  of  foct.  Was  there  or  not  an  error 
between  the  parties'?  And  the  determination  of  that  fact  controls  the 
result.  Where  this  expression  of  the  %vaut  of  care  and  attention  is  used 
in  reference  to  cases  of  simple  mistakes  of  fact,  by  which  one  has  thus  re- 
ceived the  money  of  another,  and  that  it  is  thus  used  in  many  cases  can- 
not be  denied,  the  expressions  have  not  been  duly  considered.  In  support 
of  this  view,  I  refer  to  Townsend  v.  Crowdy.*  A.  had  agreed  with  B.  to 
purchase  his  share  of  a  partnership  business,  for  a  given  sum,  subject  to 
diminution,  if  a  moiety  of  the  profits  for  three  years  should  be  less  than  a 
certain  amount.  Having  made  a  partial  investigation  of  the  accounts,  and 
believing  that  the  profits  had  reached  the  amount  named,  A.  paid  the  sum 
in  full.  Six  months  afterwards,  a  more  accurate  estimate  having  been 
made,  it  was  discovered  that  tlie  profits  were  considerably  less  than  the 
estimated  amount.  Held,  that  the  payment  having  been  made  under  a 
mistake  of  fact,  A.  was  entitled  to  recover  back  from  B.  the  sum  paid  in  ex- 
cess. In  ordering  judgment  upon  the  case  stated,  Eule,  Cliicf  Justice, 
said  :  "  I  am  of  the  opinion  that  our  judgment  in  this  case  shuidd  be  for 
the  plaintiff.  ...  It  seems,  from  a  long  series  of  cases  from  Kelly  v. 
Solan  *  down  to  Dails  v.  Lloyd,^  that  where  a  party  pays  money  under 
a  mistake  of  fact,  he  is  entitled  to  recover  it  back,  although  ho  may,  at 
the  time  of  the  payment,  have  had  means  of  knowledge  of  which  he  has 
neglected  to  avail  himself."  Williams,  J.,  said:  "I  aiu  entirely  of  the 
same  opinion.  .  .  .  Since  the  case  of  Kelly  r.  Solari,  it  has  boon  established 
that  it  is  not  enough  that  the  party  had  the  means  of  learning  the  truth, 
it  ho  had  chosen  to  make  iucjuiry.  The  only  limitation  now  is,  tliat  ho 
must  not  waive  all  inquiry."     Willf-s,  J.,  concurred.      iUi.Ks,  J,,  Kiii.l  :   "  I 

1  3  Comst.  237.  »  4  Barb.  95.  >  8  ('.  B.  N.  h.  170,  4'.>'^. 

«  9  M.  k  W.  54.  M2  Q.  1?.  531. 


468  THE    KINGSTON   BANK   V.    ELTINGE.  [CIIAP.  II. 

am  of  the  same  opinion.  .  .  .  All  the  three  courts  have  held  that  the  right 
to  recover  back  money  so  paid  is  not  fettered  by  the  condition  suggested, 
that  there  shall  not  only  be  absence  of  knowledge  but  also  absence  of  the 
means  of  knowledge  of  the  facts." 

In  Kelly  v.  Solari,  above  referred  to,'  the  plaintiff  represented  a  life 
assurance  company,  and  brought  the  action  to  recover  from  Madame  Solari 
the  sum  paid  to  her  on  a  life  policy  of  £1,000  in  favor  of  her  deceased  hus- 
band. The  deceased  having  neglected  to  pay  his  quarterly  premium  in 
September,  the  directors  of  the  company,  in  November  following,  wrote 
upon  the  policy  the  word  "lapsed."  M.  Solari  died  in  October,  and  in  the 
February  following,  the  defendant  proved  her  husband's  will,  demanded 
the  payment  of  the  policy,  and  received  the  amount  less  a  sum  deducted 
for  payment  before  maturity.  The  directors  testified  that  at  the  time  of 
making  the  payment,  they  had  forgotten  that  the  policy  had  been  lapsed. 
At  the  trial  the  Lord  Chief  Baron  expressed  his  opinion,  that  if  the  directors 
had  had  knowledge,  or  the  means  of  knowledge,  of  the  policy  having  lapsed, 
the  plaintiff  could  not  recover,  and  that  their  afterwards  forgetting  it 
would  make  no  difference.  He  directed  a  nonsuit,  reserving  leave  to  the 
plaintiff  to  move  for  a  verdict  for  the  amount  claimed.  On  such  motion 
being  made,  Lord  Abinger,  C.  B.,  said:  "I  think  the  plaintiff  ought  to 
have  had  the  opportunity  of  taking  the  opinion  of  the  jury,  whether  in  reality 
the  directors  had  knowledge  of  the  facts,  and  therefore,  that  there  should  be 
a  new  trial  and  not  a  veixlict  for  the  plaintiff;  although  I  am  now  prepared 
to  say  that  I  laid  down  the  rule  too  broadly  at  the  trial,  as  to  the  effect 
of  their  having  had  means  of  knowledge."  Parke,  B.,  concurred,  say- 
ing, among  other  things  :  "  The  position  that  a  person  so  paying  is  pre- 
cluded from  recovering  by  laches,  in  not  availing  himself  of  the  meaiis  of 
knowledge  in  his  power,  seems  from  the  cases  cited  to  have  been  founded  on 
the  dictum  of  Mr.  Justice  Bayley,  in  Milner  v.  Duncan,^  and  with  all  re- 
spect to  that  authority,  I  do  not  think  it  can  be  sustained  in  point  of  law. 
If,  indeed,  the  money  is  intentionally  paid  without  reference  to  the  truth 
or  falsehood  of  the  fixct,  the  plaintiff  meaning  to  waive  all  inquiry  into  it, 
and  that  the  person  receiving  shall  have  the  money  at  all  events,  whether 
the  fact  be  true  or  false,  the  latter  is  certainly  entitled  to  claim  it ;  but  if 
it  is  paid  under  the  impression  of  the  truth  of  a  fact  which  is  untrue,  it 
may,  generally  speaking,  be  recovered  back,  however  careless  the  party 
paying  may  have  been  in  omitting  to  use  due  diligence  to  inquire  into  the 
fact." 

The  case  of  Dails  v.  Lloyd,  referred  to  in  the  above  opinion,  is  reported 
also  in  12  Ad.  &  E.  N.  s.  531.  These  cases  show  that  the  question  of 
care  and  diligence  does  not  arise  in  an  action  like  the  pi'esent. 

The  next  yjroposition  of  the  respondents  is,  that  by  the  discharge  of  their 
judgments  they  have  lost  their  lien  upon  the  real  estate  of  their  judgment 

1  9  M.  &  W.  54.  "  6  B.  &  C.  671. 


SECT.  I.]  THE   KINGSTON   BANK   V.    ELTINGE.  469 

debtors,  and  if  compelled  to  refund  would  lose  their  debt.  To  state 
it  iu  another  form,  they  insist  that  the  claim  against  them  cannot  be  main- 
tained, unless  they  can  be  restored  to  their  original  position,  and  secured 
from  the  intervention  of  other  liens  and  purchases.  This  they  say  cannot 
now  be  done,  citing  Crozier  v.  Acker.*  That  was  the  case  of  a  mistake  of 
law.  The  Chancellor  says  :  "  If  this  court  can  relievo  against  a  mistake 
in  law  in  any  case,  where  the  defendant  has  been  guilty  of  no  fraud,  which 
is  ver}'  doubtful,  it  must  be  in  a  case  in  which  tiie  defendant  has  lost 
nothing  by  the  mistake,  and  where  the  parties  can  be  restored  to  the  same 
situation  iu  which  they  were  at  the  time  the  mistake  happened." 

The  application  of  this  principle  to  tlie  present  case  would  substantially 
destroy  the  rule  that  money  paid  in  mistake  of  facts  can  be  recovered  by 
the  payer  from  the  receiver.  If  the  facts  could  be  so  arranged,  that  there 
would  be  no  loss  to  either  party,  there  would  be  nothing  to  contend  about, 
and  no  such  actions  would  be  brought.  It  is  only  where  the  retention  or 
restoration  of  the  money  involves  a  loss  that  the  parties  are  an.\ious  about 
it.  It  is  an  ordinary  result  of  the  transaction,  that  the  party  receiving  has 
incurred  liabilities  or  paid  money  which  he  would  not  have  done,  except 
for  the  receipt  of  the  money.  I  find  no  case,  however,  in  whitli  this  has 
been  held  to  relieve  him  from  the  performance  of  his  duty.  In  the  present 
case,  the  one  party  or  the  other,  upon  the  facts  found,  will  lose  his  debt. 
By  cancelling  their  judgment,  the  respondents  will  have  lost  an  available 
security.  By  failing  to  receive  the  amounts  due  to  them  upon  their  sul>- 
sisting  executions,  the  appellants  will  have  lost  their  debt.  One  party  or 
the  other  being  compelled  to  lose,  the  question  is,  which  shall  it  be.  The 
answer  given  by  the  authorities  is,  that  the  party  having  the  legal  right 
must  prevail.  In  the  Canal  Bank  v.  Bank  of  Albany,-  which  was  an  action 
by  one  bank  to  recover  from  the  other  the  amount  of  a  draft  paid  to  it 
upon  a  forged  indorsement  of  the  name  of  the  payee,  the  plaintiff  recovered 
as  for  money  paid  by  mistake,  and  it  was  held  no  defence  to  show  that  the 
defendant  had  collected  the  money  as  the  agent  of  another  bank  in  tiio 
city  of  New  York,  and  had  in  good  faith  and  without  notice  paid  over 
the  money  to  its  principal.  Here  a  loss  was  inevitable  to  tlio  defendant  or 
its  princi])al,  and  it  was  impossible  to  restore  them  to  tho  position  of  tha 
hoMer  of  an  unmatured  and  unprotected  draft.  They  were  held  liable 
ncverthoK'ss. 

In  Bank  of  Commerce  v.  Union  Bank,'  the  same  principle  is  laid  down 
and  in  tho  same  niainuT.  The  Union  IV.uik  iiad  paid  to  its  New  Orleans, 
correspondent  the  money  received  from  tlie  plaiuti!!'. 

In  Ilheel  v.  Ilioks.''  a  complaint  had  been  made  against  the  i)laintiir  that 
he  was  tlie  father  of  a  bastard  child,  of  wliich  one  Louisa  Hope  was  preg- 
nant, and  upon  the  oath  of  the  said  Louisa,     'i'he  plaintilf  was  urrestedj 

»  7  I'aiKc,  137.  M  Hill,  287. 

»  3  CoiMst.  230.  «  25  N.  Y.  289. 


470  THE    KINGSTON   BANK   V.    ELTINGE.  [CHAP.  II. 

and  compromised  the  matter  with  the  superintendent  of  the  poor  by  pay- 
ing him  fifty  dollars  in  consideration  of  a  full  settlement  and  release  for 
the  child's  support.  It  turned  out  that  the  complainant  was  not  pregnant 
with  a  child  by  any  one,  and  that  she  was  not  delivered  of  a  child  at  all. 
The  plaintiff  brought  his  action  against  the  defendant  to  recover  back  the 
money  paid,  and  recovered.  This  court  also  held  that  the  fact  that  he 
had  paid  over  the  money  to  the  county  did  not  alter  the  case,  although 
it  was  his  duty  so  to  pay  over  all  moneys  received  for  the  support  of 
bastards. 

Neither  of  the  propositions  on  which  the  judgment  of  the  Supreme 
Court  is  supposed  to  be  based  can  be  maintained.  There  is  nothing  to 
except  this  case  from  the  general  principles  applicable  to  its  class,  and, 
upon  the  facts  found,  the  judgment  should  have  been  for  the  plaintiff. 

The  Supreme  Court  could  readily  vacate  the  satisfaction  of  the  judg- 
ments and  restore  the  defendants  to  their  former  position,  so  far  as  the 
judgment  debtors  are  concerned.     Should  there  have  been  bo7ia  fide  pur- 
chases in  the  mean  time,  the  case  would  be  more  complicated,  and  we  are 
not  called  upon  to  say  what  would  be  the  result.     In  any  event,   I  think 
this  consideration  cannot  prevent  the  plaintiffs  from  recovering  the  moneys 
justly  due  to  them.     Adams  v.  Smith  ;  ^  Barker  v.  Kissinger.'' 
The  judgment  should  be  reversed  and  a  new  trial  granted. 
Daniels,  J.,  dissenting.     The  money  which  formed  the  subject  of  the 
present  controversy  was  derived  from  a  sale  of  the  steamboat  Alida,  made 
under  executions  issued  upon  judgments  recovered  by  the  plaintiff  against 
her  owner.     The   purchaser   at  the   sale,    by    the   consent   of  the  plain- 
tiff, made  and  delivered  his   note  to    the   shcriflF  for  the  amount  of   his 
bid.     And  when  the  money  in  dispute  was  paid,  it  was  paid  by  the  pur- 
chaser upon  judgments  recovered  against  the  same  defendant  in  favor  of 
the  Huguenot  Bank.     At  that  time  it  was  supposed  by  that  bank,  and 
also  by  the  plaintiff,  that  the  sale  had  in  fact  been  made  under  the  execu- 
tions issued  upon  the  judgments  of  the  Huguenot  Bank,  and  that  conse- 
quently that   bank   had  the  prior  right  to   receive  the  money.     Under 
that  supposition  the  plaintiff  consented  that  the  money  should  be  paid 
upon    the  judgments  recovered    by   the   Huguenot   Bank,   and  that  they 
should  be  cancelled  of  record.     This  proved  to  be  a  mistake,  for  the  execu- 
tions of  the  Huguenot  Bank  had  expired  before  the  levy  upon  the  steam- 
boat was  made.     At  the  time  when  the  money  was  paid,   the  judgments 
of  the  Huguenot   Bank  were  liens  upon  real   estate  of  sufficient  value  to 
pay  and  satisfy  them.     This  was  afterwards  sold  under  other  judgments 
recovered  against  the  debtor,  and  the  proceeds  applied  in  payment  of  them. 
The  question,  therefore,  arises,  as  one  of  the  parties  must  be  subjected  to 
the  loss  of  the  money  in  controversy,  upon  whom  should  that  loss  in  justice 
and  equity  be  imposed  ?     No  positive  wrong  can  be  attributed  to  either 
i  5  Cow.  280.  2  14  N.  Y.  270. 


SECT.  I.]  THE   KINGSTON   BANK   V.    ELTINGE.  471 

of  them.  For  they  each  acted  under  the  mistaken  assumption  of  the 
existence  of  an  important  fact,  concerning  which  each  was  eiiually  bound 
to  inquire.  And  the  means  of  knowledge  of  its  actual  existence  were 
equally  accessible  to  them  both. 

The  consequences  of  a  recovery  by  the  plaintiff  will  be  precisely  the 
same  to  the  defendant  as  those  arising  out  of  the  maintenance  of  the 
defendant's  defence  will  be  to  the  plaintiff.  If  the  plaintiff  shall  succeed, 
it  will  leave  tlie  defendant's  judgments  to  that  extent  unpaid,  but  incapa- 
ble of  being  restored  as  liens  upon  the  debtor's  property.  While  the  suc- 
cess of  the  defendant  will  leave  the  plaintifTs  judgment  standing  against 
the  same  debtors,  divested  of  the  means  of  payment  which  the  levy  and 
sale  under  them  had  supplied  them  with.  For  while  the  levy  continued 
and  when  it  was  followed  by  the  sale,  the  plaintiff's  judgments  were  pro 
taiito  paid,  but  the  payment  was  not  an  absolute  satisfaction  or  discharge. 
It  was  still  subject  to  the  contingency  that  the  judgments  would  be  revived 
against  the  debtors  in  case  actual  payment  was  prevented,  without  any 
fault  of  the  creditor  or  of  the  sheriff  who  was  acting  in  its  behalf.  In  this 
case  no  such  fault  was  attributable  to  either.  For  by  the  mistake  of  the 
parties  the  money  which  was  realized  from  the  sale  of  the  property,  was 
applied  in  payment  of  other  debts  which  its  owner  was  equally  liable  to 
pay.  No  complaint,  therefore,  can  be  made  by  him,  for  he  has  had  the 
full  benefit  of  the  property  sold,  by  the  application  of  its  proceeds  in  the 
payment  of  his  debts.  And  under  those  circumstances  he  could  not  avail 
himself  of  the  technical  and  temporary  payment  made  by  means  of  the 
levy  and  sale^  which  was  afterwards  defeated  by  the  mistaken  action  of  his 
creditors  without  in  any  manner  increasing  his  liabilities,  for  the  purpose 
of  preventing  the  future  collection  of  the  plaintiff's  judgments.  People  v. 
Hodgson;^  Peck  v.  Tiffany.'^  The  equities,  therefore,  were  entirely  equal 
between  the  parties  to  this  action. 

It  was,  however,  insisted  by  the  learned  counsel  for  the  plaintiff,  that 
his  client  enjoyed  the  legal  right,  and  that  it  should  prevail  for  that  reason. 
In  this  the  counsel  was  in  error,  for  until  the  money  was  actually  paid 
over,  the  creditor  had  no  legal  title  to  it.  The  note  which  was  taken  by 
the  sheriff  upon  the  sale  was  owned  by  him,  for  the  benefit,  howovor,  of 
the  creditor  who  should  prove  to  be  legally  entitled  to  receive  its  proceeds. 
lUit  imtil  it,  or  the  proceeds  derived  from  it,  were  delivered  over  to  the 
creditor,  the  latter  acquired  no  legal  title  to  cither.  As  neither  was  ever 
delivered  t(»  the  plaintiff,  but  the  proceeds  were  paid  to  the  defendant  with 
the  plaintiffs'  consent,  the  latter  can,  in  no  just  or  proper  sense,  be  said  to 
own  the  money  in  dispute.  Tiio  most  that  can  bo  aflirmed  in  its  favor  is 
that  it  was  entitled  to  beeomc  the  owner,  but  relinquished  its  right  to  do 
so  in  favor  of  the  defendant.  And  this  united  the  legal  title  with  tlie 
equities  then  created  by  the  cancellution  of  the  defendant's  judginentH  in 
1  1  Di-ni...  574,  578.  "  2  Cm.  4.M.  V,n. 


472  THE    KINGSTON   BANK   V.    ELTINGE.  [CHxVP.  II. 

favor  of  the  latter,  which  in  equity  would  constitute  a  sufficient  answer 
to  the  plaintiffs'  action.  For  it  is  an  established  principle  of  that  juris- 
prudence, that  the  legal  title  shall  prevail  in  all  transactions  brought  within 
its  cognizance,  wdiere  the  equities  prove  to  stand  upon  an  equality. 

The  recoveries  which  were  had  in  the  cases  relied  upon  by  the  plaintiffs' 
counsel  were  all  sustained  by  that  principle,  for  the  evidence  showed  thot 
the  moneys  which  the  defendants  were  required  by  the  judgments  to  re- 
fund, were  owned  by  the  plaintiffs  when  they  were  received  by  the  defend- 
ants. The  legal  title,  as  well  as  the  equitable  right,  united  in  support  of 
the  demands  made  by  the  plaintiflFs ;  and  in  addition  to  that,  they  stood 
precisely  in  the  same  relation  to  the  persons  who  had  respectively  received 
the  moneys  from  them,  and  for  that  reason  could  maintain  similar,  or  other 
adequate  actions  or  proceedings  for  their  own  reimbursement.  Canal  Bank 
V.  Bank  of  Albany  ;  ^  Bank  of  Commerce  v.  Union  Bank  ;  ^  Rheel  v.  Hicks.' 
Neither  of  these  elements  exist  in  the  plaintiffs'  favor  in  the  present  case, 
and  for  that  reason  its  action  to  recover  the  money  received  by  the  defend- 
ant in  consequence  of  the  mistake  does  not  derive  any  support  from  their 
authority. 

This  action  is  founded  upon  the  equitable  consideration  that  the  defend- 
ant has  received  the  plaintiffs'  money  under  circumstances  rendering  it 
unjust  and  inequitable  for  it  to  retain  it.  Wherever  that  is  shown  to  be 
the  case  the  action  should  be  sustained  ;  but  where,  as  in  the  present  case, 
the  money  received  by  the  defendant  was  not  the  property  of  the  plaintiff^", 
and  was  not  detained  against  equity  and  good  conscience,  neither  justice 
nor  precedent  will  sustain  the  action  brought  for  its  recovery.  In  cases  of 
this  description  it  has  long  been  held,  and  justly  so,  too,  that  the  defendant 
"  may  claim  every  equitable  allowance ;  in  short,  he  may  defend  himself 
by  everything  which  shows  that  the  plaintiff  ex  cequo  et  bono  is  not  entitled 
to  the  whole  of  his  demand,  or  any  part  of  it."  Eddy  v.  Smith ;  ^  Wright 
t.  Butler  ; '  Buel  v.  Boughton.® 

And  it  has,  therefore,  been  held  that  the  action  for  the  recovery  of 
money  paid  by  mistake  should  not  be  so  far  extended  as  to  allow  it  to  he 
maintained  where  it  will  deprive  the  defendant  of  a  right.  Eathbone  v. 
Stocking;'  Moyer  v.  Shoemaker  ;  ^  Barber  v.  Cary.^  And  this  qualifica- 
tion of  the  general  rule  clearly  includes  the  present  case. 

In  the  case  of  McDonald  v.  Todd,^°  the  action  was  brought  to  recover 
money  received  by  the  defendant  upon  a  judgment  recovered  by  him  under 
circumstances  quite  similar  to  those  presented  by  the  present  case ;  and  it 
was  maintained  solely  upon  the  ground  that  the  defendants'  attorney  had 
fraudulently  represented  the  lien  of  the  judgment  on  which  the  payment 

1  1  Hill,  287,  294.  «  3  Com.,  230,  237.  »  25  N.  Y,,  289. 

4  13  Wend.  488,  490.  *  6  Wend.  284,  290.  «  2  Dcnio,  91. 

7  2  Barb.  135,  145.  85  Barb.  319,  322.  ^  11  Barb.  549,  551-52. 
w  1  Grant  (Pa.),  17. 


SECT.  l]      UNION   N.  BANK    OF   TKOY    V.   SIXTH    N.  BANK    OF   N.  Y.        473 

was  made,  to  be  prior  to  that  of  the  plaint ifls.  Gibson',  J.,  who  delivoreil 
the  opiuion  of  the  court,  hold  that  the  defendant  could  have  retained  tho 
money  if  it  had  not  been  for  the  fraud  perpetrated  by  his  attorney. 

There  is  no  legal  ground  upon  which  a  recovery  by  the  plaintitf  coulil  be 
properly  or  justly  sustained  ;  the  judgment  should,  therefore,  be  athrmed. 

All  the  judges,  except  Daxiels,  J.,  concurring  with  Hunt,   C.  J.,  for 
revei'sal,  upon  the  grounds  stated  in  his  opinion, 

Judijment  reversed  and  new  trial  ordered. 


THE   UNION   NATIONAL   BANK   OF   TROY,    Respondent,    v.  THE 
SIXTH   NATIONAL   BANK    OF   NEW   YORK,  Appellant. 

In  the  Court  of  Appeals  of  New  York,  January  21,  1871. 
[Reported  in  4  Comstock;  452.] 

Appeal  by  the  defendant  from  a  judgment  of  the  late  General  Term  of 
the  Supreme  Court  in  the  third  district,  affirming  a  judgment  fur  the 
plaintiff  upon  the  report  of  Justice  Ingalls,  as  referee. 

The  action  was  by  the  plaintiff,  a  bank  doing  business  in  the  city  of 
Troy,  to  recover  a  sum  of  money  alleged  to  have  been  paid  by  it,  under  a 
mistake  of  fact,  to  the  defendant,  a  bank  in  the  city  of  New  York. 

The  facts,  as  they  appear  by  the  referee's  finding  and  the  evidence,  are 
these  :  — 

The  defendants,  having  discounted  for  one  Cregan  a  note  of  one  Bassett 
to  Ashley,  for  $1000,  which  was  dated  September  26,  ISG"),  at  four 
months,  payable  at  the  Columbia  Bank,  Chatham  Four  Corners,  indorsed 
by  the  payee,  and  by  Davidson  and  Cregan,  sent  it  before  it  was  duo  to 
the  plaintiffs  for  collection.  The  plaintiffs  sent  it  to  the  Columbia  Bank 
at  Chatham,  about  thirty  miles  from  Troy.  It  was  not  paiil  on  the  29th 
of  January,  18GG,  when  it  became  due,  but  protested,  and  notice  of  its  pn)- 
tcst  was  mailed  by  the  Columbia  Bank  to  all  parties  on  it.  The  defendants, 
upon  the  receipt  of  the  notice,  applied  to  Cregan,  and  he  paid  them  the  nolo 
and  took  it  up  on  the  -Oth  of  February,  18GG.  lie  did  not  receive  tho 
note,  as  it  was  not  returned  by  the  plaintiffs.  On  tho  Hamo  5th  of 
February,  the  plaintifl's,  not  having  received  tho  notice  of  protest  from  tho 
Columbia  Bank,  and  b(;lieving  that  tho  note  was  paid,  remitted  tho 
amount  to  the  defeiulant.s.  The  defendants  received  tiio  remittance  of 
the  amount  of  the  note  on  the  Gth  of  February,  and  supposing  that  tho 
note  had  been  paid  after  its  protest,  at  onco  refunded  the  amount  received 
by  them  to  Cregan,  the  indorser.  The  maker  and  paveo  both  resided  at 
Chatham.     The  indorsers  Davidson  and  Cre^ran  resided  in  New  York.     On 


474      UNION   N.  BANK   OF   TROY   V.    SIXTH   N.  BANK   OF   N.  Y.      [CHAP.  II. 

the  9th  of  February  the  plaintiffs  for  the  first  time  wrote  to  the  Cohimbia 
Bank,  inquiring  about  the  note.  On  the  10th  the  Columbia  Bank  re- 
turned to  the  plaintiffs  the  note  protested,  and  plaintiffs  then  sent  the 
same  to  the  defendants,  who  received  it  on  the  12th.  The  plaintiffs 
then  claimed  from  defendants  the  money  sent  for  the  note.  They  de- 
clined because  they  had  paid  it  over  to  Cregan,  who  refused  to  re- 
turn it,  and  because  they  were  not  liable.  The  plaintiffs  then,  under  an 
arrangement  with  the  defendants,  undertook  to  collect  the  note  from  the 
maker,  but  did  not  carry  the  same  into  effect.  Cregan  has  died  insolvent. 
He  alleged  that  he  had  parted  with  security  on  receiving  the  money  from 
the  defendants,  and  refused  to  pay  back  to  them  what  they  paid  him. 
There  was  no  proof,  however,  of  this. 

Samuel  Hand  and  James  Emott  for  the  appellants. 

Charles  F.  Tabor  for  the  respondent. 

FoLGEB,  J.  The  rule  established  by  the  class  of  cases  of  which  The 
Kingston  Bank  v.  Eltinge  ^  is  one,  is  not  questioned  by  the  counsel  for 
appellants.  But  he  insists  that  there  is  a  distinction  between  them  and 
the  case  in  hand.  Admitting  that  there  was  a  mutual  mistake  in  sup- 
posing that  the  note  was  paid,  when  it  was  not  paid,  he  claims  that  the 
respondents  were  negligent  in  not  making  inquiry  and  using  the  means  at 
their  hand  for  arriving  at  correct  information  of  the  facts.  But  as  a  suffi- 
cient answer  to  this,  it  is  held  that  it  is  no  bar  to  an  action  that  the  party 
paying  had  the  means  of  knowing,  and  might  have  availed  himself  of 
those  means  by  care  and  attention,  and  thus  have  arrived  at  exact 
knowledge.     Waite  v.  Leggett.^ 

"  Care  and  diligence  are  not  controlling  elements  in  the  case.  It  is  a 
question  of  fact  merely.  The  inquiry  is,  Are  the  parties  mutually  in  error, 
and  did  they  act  upon  such  mutual  mistake  %  Was  there  or  not  an  error 
between  the  parties  ?  And  the  determination  of  the  fact  controls  the 
result."     Kingston  Bank  v.  Eltinge.^ 

If  the  money  "  is  paid  under  the  impression  of  the  truth  of  a  fact  which 
is  untrue,  it  may,  generally  speaking,  be  recovered  back,  however  careless 
the  party  paying  may  have  been  in  omitting  to  use  due  diligence  to 
inquire  into  the  fact."  Kelly  v.  Solari  ;  ^  Marriott  v.  Hampton.*  If  it 
were  conceded  that  the  plaintiffs  were  subject  to  the  imputation  of  negli- 
gence, that  alone  would  not  bar  their  action. 

The  appellant's  counsel  urges,  however,  that  the  plaintiffs  were  the 
agents  of  the  defendants;  that  it  was  their  duty  to  collect  the  note  and 
remit  the  proceeds,  or  to  return  promptly  the  protested  paper.  They  did 
not  fail  in  the  first  branch  of  this  duty,  for  the  note  was  not  paid ;  nor  did 
they  fail  in  making  protest,  etc.,  of  the  note.  For  that  was  done  by  which 
all  prior  indorsers  to  the  defendants  were  charged.     IS^otice  of  non-payment 

1  40  N.  Y.  391.  2  7  Cow.  195. 

8  9  M.  &  W.  54.  *  2  Sm.  L.  C.  403,  notes. 


SECT.  I.]      UNION   N.  BANK   OF   TROY   r.    SIXTH   N.  BANK   OF   N.  Y.        475 

was  also  given  to  the  defeudauts.  It  would  not  be  dainied.  if  the  trans- 
action had  stopped  here,  that  the  defendants  would  have  any  cause  of 
complaint  against  the  plaintiffs.  It  must  be  remembered  that  tiie  notice 
of  non-payment  meant  for  the  plaintiffs  was  lost  from  or  n)iscarriod  in  the 
mail.  They  were  authorized  to  act  upon  the  natural  inference  from  the 
usual  course  of  business,  that,  no  notice  having  been  received  tif  non-pay- 
ment of  the  note,  payment  had  been  made. 

There  was  thus  far  no  failure  of  duty  to  the  defendants.  And  tlie  case 
stands  the  same  as  if  the  relations  of  the  plaintiffs  and  defendants  were 
not  those  of  agent  and  principal.  And  the  omission  on  the  part  of  the 
plaintiffs  to  make  inquiry  and  obtain  coirect  knowledge  is  no  more  preva- 
lent against  them  than  it  would  be  if  they  had  not  been  the  agent  of  the 
defendants. 

The  appellant's  counsel  makes  the  point  also  that  the  defendants, 
relying  upon  the  act  of  the  plaintiffs  and  paying  over  the  money  to 
Cregan,  from  whom  they  cannot  recover  it,  have  been  irreparably  injured, 
and  that  the  plaintiffs  are  estopped  from  denying  their  assertion  to  the 
defendants  that  the  note  had  been  paid.  Tlie  facts  bearing  upon  this 
must  be  considered  as  they  existed  on  the  day  on  which  t]\e  i)laintiffs  first 
sought  from  the  defendants  repayment  of  the  money.  This  was  about  tlie 
11th  of  February,  18G6  ;  and  for  some  time  subsequent  thereto,  Cregan 
was  a  dealer  with  the  defendants  and  had  on  deposit  with  them  an  average 
amount  large  enough  to  have  met  this  payment,  and  the  amount  of  the 
note  could  have  been  charged  against  this  deposit.  It  is  said  that  Cregan 
refused  to  repay  the  money,  alleging  that,  believing  the  note  had  been 
paid,  he  had  parted  with  collateral  security.  But  this  is  not  proven.  Au.l 
the  findings  of  the  referee  put  the  refusal  of  the  defendants  to  repay  on  the 
ground  that  Cregan  could  not  be  required  to  pay  the  note.  There  is  no 
fact  found  or  proven  which  shows  this,  or  establishes  tliat  tlie  maker  and 
indorsers  of  the  note  were  not  on  that  day  just  as  liable  to  the  defendants 
as  they  were  at  the  maturity  of  the  note.  Troy  City  Dank  r.  (Jrant ;  * 
AVilkiuson  v.  Johnson.*  The  defendants,  having  at  the  time  of  the  plain- 
tiffs' demand  upon  them  for  repayment  all  the  means  of  seeming  them- 
selves from  loss  which  they  had  on  the  day  on  whicli  the  note  matured, 
and  thus  being  in  the  same  situation  in  which  they  were  lieforc  the  pay- 
ment by  the  plaintiffs,  cann.)t  cluim  that  thoy  were  immediately  injured 
by  the  act  of  the  plaintiffs.  When  injury  does  not  necessarily  result,  it  is 
wholly  immaterial  as  respects  the  plnintifTs  right  to  recover.  And  it  is  for 
tlie  defendants  to  show  that  injury  has  resulted.  (Juild  v.  llaMridgc.' 
And  sec  Kheel  v.   Hicks.* 

Tlie  judgment  of  the  General  Term  should  be  affirmed  with  costs  to  the 
respondent. 

1  LmIo,-,  s.ii.p.  110.  a  on.  &c.  m. 

8  2  Swan,  2'J5-3ol.  *  '2:>  S.  Y.  28l». 


476  WHITE   V.    CONTINENTAL    NATIONAL   BANK.  [CHAP.  IL 

Church,  C.  J.,  and  Allen  and  Grover,  JJ.,  concur.  Allex,  J.,  expressly 
on  the  ground  that  the  defendants  did  not  necessarily  sustain  loss  by  the 
mistake.  They  wei*e  notified  in  time  to  reclaim  the  money  of  Cregan,  and 
there  is  no  evidence  to  show  that  the  situation  of  Cregan  or  the  defendants 
has  been  changed  in  the  mean  time,  or  that  either  had  parted  with  any 
security. 

Andrews,  J.,  absent.  Peckham,  J.,  having  been  a  member  of  the  court 
below,  did  not  sit. 


LEONARD  D.    WHITE  et  al,  Appellants,   v.  THE  CONTINENTAL 
NATIONAL  BANK,   Respondent. 

In  the  Court  of  Appeals  of  New  York,  March  21,  1876. 

[Reported  in  64  New  York  Reports,  317.] 

Appeal  from  judgment  of  the  General  Term  of  the  Court  of  Common 
Pleas  in  and  for  the  city  and  county  of  New  York,  affirming  a  judgment  in 
favor  of  plaintiffs  entered  upon  a  verdict,  and  affirming  an  order  denying  a 
motion  for  a  new  trial. 

This  action  was  brought  to  recover  back  money  paid  by  plaintiffs  to 
defendant,  upon  an  altered  sight  draft  drawn  upon  plaintiffs  by  their  cor- 
respondent in  Buffalo. 

The  draft  was  drawn  for  the  sum  of  twenty-seven  dollars.  After  its 
delivery  to  the  payee,  and  before  presentation  and  acceptance,  it  was 
altered  so  as  to  change  the  amount  to  $2750,  It  was  sent  by  one  Hor- 
ton,  of  Baltimore,  to  Austin  Baldwin  &  Co.,  New  York,  and  received  by 
them  August  IG,  1869.  That  firm  deposited  it  on  the  same  day  with 
defendant,  and  for  its  avails  sent  to  Horton  a  sterling  bill  of  exchange  on 
London  at  sixty  days.  Defendant  credited  said  firm  the  amount  of 
the  draft.  The  draft  was  presented,  August  17,  to  and  accepted  by 
plaintiffs,  payable  at  the  Leather  Manufacturers'  Bank,  by  whom  it  was 
paid  to  defendant.  In  the  regular  course  of  business  between  plaintiffs 
and  the  di-awer  of  the  draft,  monthly  statements  of  accounts  were  rendei-ed. 
The  August  account  was  rendered  the  forepart  of  September.  It  was  not 
examined  by  the  drawer  until  October  5,  when  the  alteration  was  first 
discovered.  Plaintiffs  were  advised  on  the  6th,  and  immediately  notified 
defendant. 

The  court  charged  among  other  things  ;  "  If  the  jury  believe  from  the 
evidence,  that  if  Austin  Baldwin  &  Co.  had  been,  either  directly  by  the 
plaintiffs  or  by  them  through  the  defendants,  informed  within  a  reasonable 
time  after  the  acceptance  of  the  draft  by  the  plaintiffs,  that  the  same  was 
forged  for  an  amount  exceeding  the  sum  of  twenty-seven  dollars,  they, 


SECT.  I.]  WIIITK   V.    CONTINENTAL    NATIONAL    DANK.  477 

Austin  Bukhvin  it  Co.,  or  the  defendants,  could  have  taken  stops  to  trace 
and  arrest  the  crime  in  its  consummation,  and  have  prevented  tlie  accept- 
ance of  their  bill  of  exchange  on  the  City  liank  of  Loudon,  and  tliat  tluy 
failed  to  take  either  of  such  steps,  by  reason  of  the  acceptance  and  payment 
of  the  draft  in  question  by  the  plaintiffs,  and  the  failure  of  the  plaintiffs  to 
advise  them  of  such  forgery  until  on  or  about  October  G,  18G9,  then  the 
plaintiffs  are  estopped  from  denying  the  genuineness  of  the  draft  in  cpu'.>;- 
tion,  and  that  the  defendants  are  entitled  to  a  verdict."  To  which  the 
plaintiffs'  counsel  excepted. 

Plaintiffs'  counsel  requested  the  court  to  charge,  that  plaintitls  were  not 
bound  to  know  that  this  draft  had  been  altered  in  the  way  it  was  altered  ; 
and  that  all  they  were  bound  to  know  when  they  accepted  it  was  that  the 
signature  to  the  draft  was  genuine.  Also,  that  if  the  plaintiffs  were  not 
legally  chargeable  with  knowledge  of  the  fact  that  the  draft  had  been 
altered,  no  duty  devolved  upon  them  to  give  any  earlier  notice  than  was 
given,  either  to  Austin  Baldwin  tfc  Co.  or  anybody  else,  of  the  fact  of  the 
alteration. 

The  court  declined  so  to  charge,  and  the  plaintiffs'  counsel  excepted. 
Hamilton  Odell  for  the  appellants. 
Wm.  Allen  Butler  for  the  respondent. 

Allen,  J.  The  right  of  a  party  paying  money  to  another  under  a  bona 
fide  forgetfulness  or  ignorance  of  facts,  to  recover  it  back  from  one  who  is 
not  entitled  to  receive  it,  is  well  established.  The  equitable  action  for 
money  had  and  received  will  lie  against  one  who  has  received  money 
which  in  conscience  does  not  belong  to  him.  Kelly  v.  Solari  ;  ^  The  Bank 
of  Orleans  v.  Smith. ^ 

The  doctrine  has  been  applied  repeatedly,  in  cases  analogous  to  the 
present.  Bank  of  Commerce  v.  The  Union  Bank  ;  M'he  Continental  Na- 
tional Bank  v.  The  National  Bank  of  the  Commonwealth  ;  *  National  Bank 
of  Commerce  v.  National  Mechanics'  Banking  Association;^  The  Marino 
National  Bank  v.  The  National  City  Bank.' 

That  the  plaintiffs  in  this  action  paid  to  the  defendant,  professing  to  le 
the  holder  of  the  bill,  the  face  of  it,  in  ignorance  of  the  facts  disentitling  the 
defendant  to  receive  the  same,  is  not  disputed.  Their  right  to  recover 
the  money  thus  paid  must  be  unquestioned,  unless  their  right  is  barred  by 
some  circumstance  which  takes  the  case  out  of  the  gcm-nd  rule,  or  l>y  some 
act  of  their  own  they  have  lost  the  right. 

Certain  general  principles,  api)lical)le  to  connncrcial  paper  and  regula- 
ting the  rights  and  obligations  of  tlie  several  parties  thereto,  are  very 
familiar  and  of  everyday  application. 

First.     The  plaintiffs,  as  drawees  of  the  bill,  were  only  held   lo  a  knowl- 
edge of  the  signature  of  their  correspondents,  the  drawers;  by  accepting 
1  9  M   &  W.  r.4.  2  3  Hill,  5flO.  »  3  Coiiisl.  •2:in. 

4  50N.  Y.  575.  6  55N.  Y.  211.  «  59  N.  Y.  fi7. 


478  WHITE   V.   CONTINENTAL   NATIONAL   BANK.  [CHAP.  XL 

and  paying  the  bill  they  only  vouched  for  the  genuineness  of  such  signa- 
tures, and  were  not  held  to  a  knowledge  of  the  want  of  genuineness  of  any 
other  part  of  the  instrument,  or  of  any  other  names  appearing  thereon,  or 
of  the  title  of  the  holder.  Kelly  v.  Solari ;  ^  Broom's  Legal  Maxims,  257  ; 
National  Park  Bank  v.  The  Ninth  National  Bank  ;  ^  Mei'chants'  Bank  v. 
State  Bank  ;  ^  Espy  v.  The  Bank  of  Cincinnati ;  *  Goddard  v.  The  Merchants' 
Bank.5 

Second.  The  defendant,  as  holder  of  the  bill  and  claiming  to  be  en- 
titled to  receive  the  amount  thereof  fi'om  the  drawees,  was  held  to  a 
knowledge  of  its  own  title  and  the  genuineness  of  the  indorsements,  and  of 
every  part  of  the  bill  other  than  the  signatm-e  of  the  drawers,  within  the 
general  principle  which  makes  every  party  to  a  promissory  note  or  bill  of 
exchange  a  guarantor  of  the  genuineness  of  every  preceding  indorsement, 
and  of  the  genuineness  of  the  instrument.  Erwin  v.  Downs ;  ^  TurnbuU 
V.  Bowyer;'  Story  on  Promissory  Notes,  §§  135,  379,  380,  381.  The  pres- 
entation of  the  bill,  and  the  demand  and  receipt  of  the  money  thereon,  was 
equivalent  to  an  indorsement.  Tlie  drawees  had  a  right  to  act  upon  the 
presumptive  ownership  of  the  defendant  as  the  apparent  holder. 

The  facts  which  disentitled  the  defendant  to  receive  the  money,  and  in 
ignorance  of  which  it  was  paid,  were  those  presumed  to  be  within  the 
knowledge  of  the  defendant  and  not  of  the  plaintiffs.  The  defendant,  in 
receiving  the  money  and  in  disposing  of  it,  did  not  act  upon  the  faith  of 
any  admission  by  the  plaintiffs,  express  or  implied,  of  any  fact  which  they 
now  controvert  in  prosecuting  this  action.  There  was,  therefore,  no  want 
of  good  faith,  no  negligence,  or  even  want  of  ordinary  care  on  the  part  of 
the  plaintiff's  in  the  payment  of  the  money.  The  defendant,  in  the  entire 
transaction,  acted  upon  other  evidence  of  its  right  to  the  money  than  the 
statement  or  actions  of  the  plaintiffs,  and  in  dealing  with  the  bill  and  with 
the  money,  its  avails,  acted  upon  the  apparent  title  and  genuineness  of  the 
instrument,  and  the  responsibility  of  those  from  and  through  whom  it 
received  the  bill.  The  plaintiffs,  therefore,  owed  no  duty  to  the  defendant 
in  respect  to  the  forgery  which  invalidated  the  bill  and  its  title  to  the 
moneys  represented  by  it. 

It  follows  that  there  could  be  no  negligence  on  the  part  of  the  plain- 
tiffs which  could  defeat  their  right  to  reclaim  the  money  paid  whenever 
the  forgery  and  the  consequent  mistake  in  the  payment  were  discovered. 
Owing  no  duty  and  making  no  misrepresentation,  there  was  no  estoppel  to 
bar  the  action.  The  case  is  distinguishable  from  The  Continental  National 
Bank  v.  The  National  Bank  of  the  Commonwealth,^  in  this,  that  in  the  case 
cited  the  officer  of  the  bank  pronounced  a  forged  certification  of  a  check  to 
be  genuine,  upon  which  the  payee  of  the  check  relied,  as  he  had  a  right  to 
1  9  M.  &  W.  54.  2  46  N.  Y.  77.  ^  lo  Wall.  604. 

4  ]8  Wall.  604.  s  4  Comst.  147.  ^  15  N.  Y.  575. 

7  40  N.  Y.  456.  8  50  N.  Y.  575. 


SECT.  I.]  -WHITE    V.    CONTINENTAL    NATIONAL    BANK.  479 

do,  and  thus  relying  neglected  to  take  the  lueaus  then  in  his  power  to 
retrieve  his  position  und  save  himself  from  loss.  Tlie  court  held  that  tho 
circumstances  created  an  equitable  estoppel,  and  that  the  bank  could  not 
thereafter  gainsay  the  genuineness  of  the  certification  which  it  had  adopted 
and  upon  which  the  other  parties  had  acted.  It  will  be  seen  that  this 
estoppel  was  based  upon  the  admission  of  a  fact  peculiarly  within  tho 
knowledge  of  the  bank  upon  which  the  check  was  drawn,  and  wiiicii  it  was 
bound  to  know,  and  upon  a  positive  assertion  upon  which  tho  other  party 
had  a  right  to  and  did  rely.  In  this  case,  as  we  have  seen,  the  plaintitl's 
made  no  assertion  of  any  fact  within  their  knowledge,  and  the  defendant 
did  not  act  or  forbear  to  act  upon  the  faith  of  anything  which  the  plaintiffs 
said  or  did  or  omitted  to  say  or  do. 

Again,  in  the  case  cited,  had  the  teller  of  the  certifying  bank  disclaimed 
the  forged  certification  and  pronounced  it  a  forgery  when  presented,  tho 
holder  of  the  check  would  have  had  ample  time  to  arrest  the  swindler  at 
the  bank  of  the  State  of  New  York,  before,  as  the  evidence  showed,  he  had 
received  the  money  on  the  gold  checks,  and  before  he  went  to  tho  sub- 
treasury  with  his  gold  certificates. 

In  the  case  at  bar,  it  is  the  merest  conjecture,  with  scarcely  a  possibility 
to  support  it,  that  the  defendant,  or  those  from  whom  it  received  the  bill, 
could  at  any  time  after  the  transmission  of  the  foreign  bill  of  exchange  to 
Baltimore,  have  taken  any  effectual  measures  either  for  arresting  tho 
swindler  or  reclaiming  the  bill  bought  and  paid  for  upon  the  credit  of  tho 
bill.  Estoppels  cannot  be  based  upon  mere  conjectures,  even  if  a  proper 
foundation  is  laid  for  them  in  other  respects.  There  is  nothing  really  in 
the  case  to  distinguish  it  from  The  National  Bank  of  Conunerce  v.  Tho 
National  Banking  Association,*  in  which  the  plaintiff  recovered. 

Should  this  action  be  retried  other  questions  may  arise  not  presented  by 
this  record,  growing  out  of  the  relations  between  the  defendant  and  other 
parties,  and  the  character  in  which  the  defendant  acted,  whether  as  agent 
or  principal.  Upon  the  present  record  the  equities  are  witii  the  plaintitls. 
If  they  fail  to  recover,  they  lose  the  money  absolutely  and  without  legal 
fault  on  their  part.  If  the  defendant  is  compelled  to  reimburse  tho  plaintiffs, 
it  has  its  remedy  over  against  tho  prior  indorsers  ;  and  if  they  in  turn 
have  no  remedy  against  the  prior  indorsers,  it  is  because  they  have  chosen 
to  deal  with  irresponsible  persons,  or  those  of  whose  character  and  reapon- 
ail)ility  they  were  ignorant.  It  would  be  unjust  to  father  the  consecpiences 
of  their  method  of  dealing  upon  innocent  thinl  persons.  But  waiving  tho 
question  as  to  the  responsibility  of  tiie  defendant  for  the  genuineness  of 
the  instrument,  and  taking  the  most  favorable  view  for  tho  defendant, 
which  is  to  regard  it  as  the  case  of  a  mutual  mistake,  in  respect  to  winch 
neither  was  in  fault,  and  in  tliat  vi.'w,  aixl  upon  tluit  theory,  tho  case  is 
within    the    principles   decided    in   'J'he    l?auk   of  Commerce    v.  Tho   Union 

I  55  N.  Y.  211. 


480  WHITE   V.    CONTINENTAL    NATIONAL    BANK,  [CHAP.  IL 

Bank  ;  ^  The  Kingston  Bank  v.  Eltinge,-  and  the  plaintiffs  are  entitled  to  a 
new  trial. 

Upon  the  case  as  made  and  npon  the  exceptions  taken  at  the  trial,  I  am 
of  the  opinion  that  the  judgment  should  be  reversed,  and  a  new  trial 
granted. 

Miller,  J.  (dissenting).  The  principle  is  well  settled  that  money  paid 
under  a  mistake  of  fact  may  be  recovered  Lack,  although  the  party  paying 
the  same  has  been  negligent  in  making  the  mistake,  unless  the  payment 
has  placed  the  other  paity  in  such  a  position  as  would  render  it  unjust  to 
require  him  to  refund. 

Having  this  doctrine  in  view  the  question  arises  whether  the  defendant 
was  liable  to  refund  the  avails  of  the  altered  draft  within  the  rule  stated, 
under  the  circumstances  presented  in  this  case.  The  draft  in  question 
•was  accepted  by  the  plaintiffs  upon  the  seventeenth  day  of  August,  and  it  is 
claimed  that  the  defendant,  relying  upon  the  plaintiffs'  acceptance,  lost  the 
means  and  opportunity  of  stopping  payment  of  the  sterling  bill  of  ex- 
change which  had  been  issued  in  lieu  of  the  forged  draft,  by  the  plaintiffs' 
omission  to  inform  the  defendant  of  the  forgery,  and  that  the  question  of 
fact  whether  such  a  change  of  position  had  taken  place  as  affected  the 
defendant's  rights,  was  properly  submitted  to  the  jtn-y  by  the  judge  upon 
the  trial.  The  charge  assumed  that  both  parties  acted  in  good  faith,  and 
that  negligence  could  not  be  imputed  to  either  in  dealing  with  the  forged 
draft,  and  in  this  respect  the  judge  charged  substantially  that  if  the  defen- 
dant, upon  being  advised  on  the  seventeenth  day  of  August,  could  have 
taken  precautionary  measures  which  would  have  prevented  it  from  sustain- 
ing this  loss,  then  the  plaintiffs  could  not  recover.  This  rule  as  the  case 
stood  was  not  erroneous,  and  can  be  upheld  within  the  authorities.  Con- 
ceding that  the  acceptance  of  the  draft  falls  within  the  rule,  that  by  a  cer- 
tification of  a  check  the  drawer  is  concluded  only  as  to  the  signature  of  the 
drawee  and  his  own  certification,  and  that  he  is  not  bound  to  know  the 
handwriting  of  the  filling  up,  yet,  when,  by  means  of  his  omission  to  act,  a 
loss  is  sustained,  the  party  in  fruit  shall  bear  that  loss.  This  doctrine 
was  upheld  and  is  within  the  ruling  in  the  case  of  The  National  Bank  of 
Commerce  v.  The  National  ]\Iechanics'  Bank.^  In  that  case  the  check  in 
controversy  was  altered  after  it  was  certified,  by  raising  the  amount,  and 
it  was  held  that  the  sum  paid  could  be  recovered  unless  it  was  shown  that 
the  holder  has  suffered  loss  in  consequence  of  the  mistake.  It  is  said,  in 
the  opinion  by  Judge  Eapallo  :  "  If  the  defendant  had  shown  that  it  had 
suffered  loss  in  consequence  of  the  mistake  committed  by  the  plaintiff,  as, 
for  instance,  if,  in  consequence  of  the  recognition  by  the  plaintiff  of  the 
check  in  question,  the  defendant  had  paid  out  money  to  its  fraudulent  de- 
positor, then  clearly  to  the  extent  of  the  loss  thus  sustained  the  plaintiff 
should  be  responsible."  It  appeared  that  the  money  was  paid  before  the 
1  3  Comst.  230.  ^  40  N.  Y.  391.  »  55  N.  Y.  211. 


SECT.  I.]  WHITE    V.    CONTINENTAL    NATIONAL    BANK.  481 

check  was  presented  to  the  plaintiff,  and  that  the  loss  had  been  fully  in- 
curred by  the  defendant  before  the  phiintitl'  had  made  the  mistake  wliich 
it  sought  to  have  corrected.  It  will  be  observed  that  tlie  case  differs 
materially  from  the  one  at  bar,  for  here  the  acceptance  was  made  by  the 
plaintitis  after  the  draft  had  been  altered,  and  not  before,  as  in  the  case 
cited,  and  it  cannot  be  doubted  that  the  mistake  conmutted  by  the  plain- 
tiffs by  the  recognition  of  the  draft  caused  the  defendant  to  pay  the  money. 
It  was,  therefore,  a  fair  question  for  the  jury  whether  the  loss  might  not 
have  been  averted  in  season  by  notice  of  the  forgery. 

The  case  is  also  brought  by  the  testimony  within  the  distinction  taken  by 
some  of  the  judges  in  The  Union  Bank  of  Troy  v.  The  Sixth  National  Bank 
of  New  York,^  that  where  the  defendant  neces&irily  sustains  loss  by  the 
mistake,  unless  notice  in  time  to  prevent  such  loss  is  given,  no  recovery 
can  be  had.  It  was  not  necessary  to  establish  that  the  defendant  relied 
entirely  upon  the  plaintiffs'  acceptance  to  entitle  it  to  claim  the  benefit  of 
an  estoppel ;  for  even  if,  in  conseqvience  of  it,  he  refrained  from  using 
means  which  he  had  in  bis  power  to  prevent  the  loss  finally  sustained,  the 
right  of  estoppel  will  be  upheld  and  the  loss  must  fall  on  the  party  who 
caused  it.  Continental  National  Bank  v.  National  Bank  of  the  Common- 
wealth.^ The  plaintiffs,  by  failing  to  take  the  means  to  advise  the  defend- 
ant, are  brought  directly  within  the  rule  that  when  the  omission  of  a 
party  affects  the  act  of  another,  and  he  is  thereby  misled  and  influenced  to 
his  prejudice,  the  party  in  fault  must  bear  the  loss.  The  claim  that  the 
question  submitted  to  the  jury  which  has  been  discussed  was  not  material, 
and  that  there  was  no  evidence  to  guide  the  jury  in  determining  it,  is  not 
well  founded.  It  is  not  difficult  to  see  that  the  draft  given  may  have  been 
stopped,  the  forger  arrested,  the  acceptance  in  London  have  been  pre- 
vented, or  some  measures  have  been  adopted  which  would  have  saved  all 
parties  from  loss,  if  the  defendant  had  been  notified  of  the  forgery  ;  and  it 
was  proper  for  the  jury  to  decide  this  question  of  fact. 

While  the  instructions  to  the  jury  asked  by  the  plaintiffs'  counsel  and 
refused  contained  legal  propositions  which  were  abstractly  entirely  correct 
in  a  proper  case,  neither  of  them  were  apjilicable  to  the  question  of  fact, 
which  was  for  the  jury,  and  therefore  each  of  them  was  properly  refused. 

There  was  no  error  in  the  admission  of  evidence  or  in  any  of  the  rulings 
upon  the  trial,  and  the  judgment  should  be  affirmed,  with  costs. 

For  reversal  :  Allen,  Ratallo,  Andrews,  and  K.\ui.,  .T.T. 
For   affirmance :    ^Iilleu,  J. ;    Ciiuiicii,   Ch.  J.,    and    Koloer,  J.,    not 
voting.  Jwhjment  reversed. 

1  43  N.  Y.  452.  »  50  N.  Y.  575. 

81 


482  HOLLIS   V.    EDWAKDS.  [CHAP.  II. 

SECTION     11. 

FAILURE  OF  DEFENDANT  TO  PERFORM  CONTRACT. 

(a.)    Defendaiit  relying  on  Statute  of  Frands. 

HOLLIS  V.  EDWARDS  and  Another. 
In  Chancery,  before  Sir  Francis  North,  L.  K.,  May  1,  1683. 

[Repoited  in  1  Vernon,  159.] 

In  these  cases,  bills  were  exhibited  to  have  an  execution  of  parol  agree- 
ments touching  leases  of  houses,  and  set  forth  that  in  confidence  of  these 
agreements  the  plaintiffs  had  expended  great  sums  of  money  in  and  about 
the  premises,  and  had  laid  the  agreement  to  be  that  it  was  agreed  the 
agi-eements  should  be  reduced  into  writing.  The  defendants  pleaded  the 
statute  of  frauds  and  perjuries. 

For  the  plaintiffs  it  was  insisted  on  the  saving  in  the  act  of  parliament ; 
viz.,  Unless  the  agreement  were  to  be  performed  within  the  space  of  a 
year  :  but  it  was  answered,  that  clause  did  not  extend  to  any  agreement 
concerning  lands  or  tenements.  Then  it  was  insisted  for  the  plaintiffs, 
that  undoubtedly  they  had  a  clear  equity  to  be  restored  to  the  considera- 
tion they  had  paid,  and  to  the  money  which  tliey  in  confidence  of  the 
agreement  had  expended  on  the  premises.^ 

As  touching  that  matter,  it  was  said  by  the  Lord  Keeper,  that  there 
was  a  difference  to  be  taken,  where  the  money  was  laid  out  for  necessary 
repairs  or  lasting  improvements,  and  where  it  was  laid  out  for  fancy  or 
humor ;  and  that  he  thought  clearly  the  bill  would  hold  so  far,  as  to  be 
restored  to  the  consideration  :  but  he  said,  the  difficulty  that  arose  upon 
the  act  of  parliament  in  this  case  was,  that  the  act  makes  void  the  estate, 
but  does  not  say  the  agreement  itself  shall  be  void  ;  and  therefore,  though 
the  estate  itself  is  void,  yet  possibly  the  agreement  may  subsist ;  so  that  a 
man  may  recover  damages  at  law  for  the  non-perfoi"mance  of  it ;  and  if  so, 
he  should  not  doubt  to  decree  it  in  equity  :  and  therefore  directed,  that 
the  plaintiffs  should  declare  at  law  upon  the  agreement,  and  the  defendants 
were  to  admit  it,  so  as  to  bring  that  point  for  judgment  at  law  ;  and  then 
he  would  consider  what  was  further  to  be  done  in  this  case. 

1  As  to  latter  point,  see  m/ra.  —  Ed. 


SECT.  II.]  GRAY  V.   HILL.  483 


GRAY  V.   HILL. 
At  Nisi  Prius,  before  Best,  C.  J.,  June  20,   182C. 

[Reported  in  Ryan  ^-  Moody,  420.] 

Assumpsit,  on  a  special  fxgreemcnt,  to  assign  to  the  plaintitT  a  lease  of 
certain  premises,  of  wliieli  the  defendant  was  possessed,  in  consideration  that 
the  plaintiflf  would  put  the  premises  in  good  and  sufheient  repair,  witinu 
the  covenant  of  the  defendant  in  the  lease.  Averment,  tliat  the  plaintitf 
did  put  the  premises  in  repair,  and  breach,  that  the  defendant  refused  to 
assign  the  lease.  There  was  a  count  for  work  and  labor,  and  the  usual 
money  counts. 

It  was  proved,  tliat  the  premises  had  been  admitted  by  the  defendant  to 
be  in  extreme  want  of  repair,  and  that  the  landlord  had  given  the  defend- 
ant notice  of  his  intention  to  sue  him  on  the  covenant,  unless  the  premises 
were  put  into  sufficient  repair  within  a  certain  time.  Upon  this  it  was 
verbally  agreed  between  the  plaintitf  and  the  defendant,  that  the  plaintiff 
should  repair  the  premises,  and  the  defendant  would  assign  his  lease  to 
him.  The  plaintiff  exi)ended  a  considerable  sum  of  money  on  the  premises, 
and  put  them  in  complete  repair.  Upon  his  demanding  an  assignment  of 
the  lease  the  defendant  refused. 

Vaughan,  Serjt.,  for  the  defendant,  contended,  that  the  agreement  was 
void  under  the  statute  of  frauds,  and  the  plaintiff  could  therefore  not  re- 
cover damages  for  the  breach  of  it;  the  plaintiff  undertook  the  repairs 
under  the  promise  of  an  assignment,  which  promise  was  not  binding. 

Wilde,  Serjt.  The  defendant  has  had  the  benefit  of  the  plaintiff's  labor, 
and  money  expended  at  his  request,  and  though  he  is  not  legally  liable  to 
assign  the  lease,  the  law  upon  his  refusal  implies  a  promise  to  compensate 
the  plaintiff'.^ 

Best,  C.  J.  The  ofijedion  is  a  most  dishonest  one,  hut,  if  lefjal,  must 
prevail.  Tlie  4th  sectii)n  of  the  statute  is  decisive  against  the  plaintiff  on 
the  special  count,  l>ut  I  think  the  plaintiff  entitled  to  a  verdict  on  the 
others.  The  iilaintilf  has  expended  this  money  for  the  benefit,  and  at 
the  instance  of  tlie  defendant  ;  the  law  will  therefore  imply  a  promise  not 
touched  by  the  statute,  nor  within  the  danger  of  perjm-y  guarded  against 
by  it;  the  agreement  is  executed  on  the  part  of  the  plaiutilV,  and  the  de- 
fendant is  legally  liable  to  remunerate  him  for  wliat  ho  has  done. 

7'he  cause  was  then  nf erred. 

Wilde,  8crjt.,  and  Chitty  for  the  plaintiff. 
Vangkan,  Serjt.,  and  Justice  ft)r  the  defendant. 
1  2  riiilli|ii)«'«  KviiI'Dcc,  07. 


484  KNOWLMAN   V.   BLUETT.  [CHAP.  II. 


KNOWLMAN  v.   BLUETT. 
In  the  Exchequer  Chamber,  June  12,  1874. 

[Reported  in  Laiv  Reports,  9  Exchequer,  307.] 

Appeal  by  the  defendant  from  a  decision  of  the  Coui't  of  Exchequer 
refusing  a  rule  to  enter  a  nonsuit.^ 

The  defendant,  who  was  the  father  of  seven  illegitimate  childi'en  of  the 
plaintiif,  agreed  with  her  verbally  to  pay  her  300/.  per  annum,  by  equal 
quarterly  instalments,  for  so  long  as  she  should  maintain  and  educate  the 
children.  At  the  time  of  the  making  of  the  promise  the  eldest  child  was 
about  fourteen  years  old.  For  several  years  the  plaintiff  maintained  and 
educated  the  children,  and  the  defendant  paid  the  agreed  sums.  At 
Michaelmas,  1870,  he  discontinued  his  payments.  The  plaintiff  continued 
to  maintain  and  educate  the  children,  and  in  May,  1873,  brought  an  action 
for  two  and  a  half  years'  arrears. ** 

Arthur  Charles,  Cole,  Q.  C,  and  Lopez,  Q.  C,  with  him,  for  the  de- 
fendant. 

Folkard,  St.  Auhyn  with  him,  for  the  plaintiff,  was  not  called  on. 

Blackburn,  J.  We  are  of  opinion  that  the  Court  of  Exchequer  was 
right  in  refusing  a  rule  in  this  case.  The  bargain  between  the  paities  was 
that  if  the  plaintiff  would  take  cai-e  of  and  maintain  the  children,  the 
defendant  would  pay  her  300/.  a  year  as  long  as  she  did  so.  This  arrange- 
ment was  never  revoked,  and  the  plaintiff  having  taken  care  of  and  main- 
tained the  children,  now  sues  for  arrears  due  to  her.  It  is  said  that  the 
action  is  not  maintainable  because  there  is  no  memorandum  in  writing  of 
the  bargain.  But  tlie  plaintiff  has  performed  her  part  of  it,  and  it  would 
be  unjust  if  she  could  not  obtain  repayment  of  the  sums  she  has  expended. 
She  could  have  maintained  an  action  for  "  money  paid  at  the  defendant's 
request,"  and  it  would  have  been  no  answer  to  have  said  that  the  term  in 
respect  of  which  she  was  suing  was  longer  than  a  year,  and  that  the  agree- 
ment which  fixed  the  rate  of  remuneration  was  one  not  to  be  performed 
within  a  year.  We  think  that  in  substance  her  present  claim  is  for  money 
paid,  although  the  declaration  is  in  form  upon  a  special  contract. 

Keating,  Mellor,  Lush,  Grove,  and  Archibald,  JJ.,  concurred. 

Jtidgment  affirmed. 

1  L.  R.  9  Ex.  1. 

2  This  statement  of  facts  is  taken  from  the  head  notes.  —  Ed. 


SECT.  II.]  PULBROOK    V.    LAWES.  485 


PULBROOK   V.   LAWES. 
In  the  Queen's  Bench  Division,  January  19,  187G. 

[Reported  in  Law  Reports,  1  Queen's  Bench  Division,  284.] 

Declaration  that  the  plaintiff  and  the  defendant  agreed  that  the  defend- 
ant should  grant  to  the  plaintiff,  and  that  the  phiintiff  shouhl  accept  of 
the  defendant,  a  lease  of  a  dwelling-house  in  Seven  Sis^tera  Koail,  for  seven, 
fourteen,  or  twenty-one  years,  upon  condition  that  the  defendant  should 
curry  out  certain  suggestions  of  the  plaintiff  as  to  certain  specified  altera- 
tions and  improvements  in  and  to  the  dwelling-house,  the  plaiutitf  to  pay 
75/.  towards  the  alterations  and  improvements,  at  the  yearly  rent  of  120/., 
and  that  before  the  execution  of  the  lease  the  defendant  should  execute  the 
alterations  and  improvements,  and  all  conditions  were  fulfilled,  etc.,  to 
entitle  the  plaintiff  to  have  the  alterations  and  improvements  executed  by 
the  defendant,  yet  the  defendant  has  not  executed  the  alterations  and  im- 
provements, etc.,  whereby  the  plaintifi'  has  been  deprived  of  the  said  lease, 
and  divers  expenses  incurred  by  the  plaintiff  in  jireparing  to  take  posses- 
sion of  the  house  and  in  making  certain  alterations  and  improvements  in 
anticipation  of  the  said  alterations  and  improvements  being  executed  by 
the  defendant,  In-  his  permission,  became  wholly  lost  and  useless  to  him. 

Common  counts  for  woik  done  and  materials  ])rovided  by  the  plaintiff 
for  the  defendant,  for  money  paid,  and  money  due  upon  accounts  stated. 

Pleas,  as  to  first  count,  denial  of  the  agreement  and  the  breaches.  As  to 
the  common  counts,  never  indebted.     Joinder  of  issue. 

At  the  trial  a  verdict  was  taken  for  the  plaintiff,  subject  to  the  award 
of  an  arbitrator,  who  stated  the  following  case  :  — 

1.  The  plaintiff  is  an  attorney  and  solicitor,  and  the  defendant  is  a 
cabinet-maker.  The  plaintiff,  in  a  letter  dated  the  20th  of  May,  1873, 
proposed  to  take  a  lease  of  one  of  the  defendant's  iiou.ses  if  ho  would  carry 
out  certain  suggestions  and  alterations  contained  in  the  letter.  A  coires- 
pondence  ensued  between  the  j)artios,  and  it  was  ultimately  a^'reed  between 
them  that  certain  alterations  should  bo  done,  the  plaintiff  to  pay  a  sum  of 
75/.  towards  them. 

2.  Tfie  plaintiff  wished  to  have  the  drawing  room  painted  in  a  particu- 
lar way,  and  the  defendant  consented  that  he  shoulil  kimkI  in  his  own  work- 
men to  paint  it,  and  ho  accordingly  did  so.  (!as  pipes  were  laid  down  liy 
the  plaintiff,  and  certain  alterations  and  inipniveineiits  were  made  by  him 
with  the  (iefendaiit's  knowledge  and  consent,  and  with  a  view  to  the  j)lain- 
tifl's  occupancy  of  the  premises.  In  anticipation  of  the  house  being  hamled 
over  to  him  in  accordance  with  the  terms  proposed  in  the  letter  of  the  20th 
of  May,  and  subseipient  letters,  the  plaintiff  ordered   certain   gas  fittings, 


486  PULBROOK  V.   LAWES.  [CHAP.  II. 

cornices,  and  blinds  to  be  made  to  fit  the  house,  and  paid  certain  sums  of 
money  for  work  done  and  materials  provided  at  the  defendant's  request  for 
decorating  the  drawing-room  and  making  the  agreed  alterations. 

3.  From  divers  causes  the  alterations  and  suggestions  proposed  by  the 
plaintiff  and  agreed  to  be  done  by  the  defendant  were  so  long  in  being 
carried  out  by  the  defendant  (and  never  were  in  fact  fully  carried  out)  that 
the  plaintiff  was  compelled  to  decline  to  take  the  house  ;  the  fittings  for 
gas,  cornices,  and  blinds  which  he  had  had  expressly  made  for  the  house 
he  was  obliged  to  sell  at  a  kiss ;  and  the  money  he  paid  for  work  and  labor 
done  at  the  defendant's  request  was  also  lost  to  him. 

4.  It  is  alleged  on  the  part  of  the  defendant  that  certain  letters  to  be 
found  in  the  appendix  to  this  case  form  no  agreement  so  as  to  satisfy  the 
requirements  of  the  4th  section  of  the  Statute  of  Frauds,^  and  this  ques- 
tion, at  the  request  of  the  defendant,  is  submitted  for  the  consideration  of 
the  court. 

5.  In  the  event  of  the  court  being  of  opinion  that  the  point  is  sustain- 
able, and  goes  to  the  whole  declaration,  then  the  arbitrator  directed  a 
verdict  to  be  entered  for  the  defendant  generally. 

6.  In  the  event  of  the  court  being  of  opinion  that  the  objection  goes  to 
the  first  count  only,  then  he  directed  a  verdict  to  be  entered  for  the  de- 
fendant on  the  first  count,  and  for  the  plaintiff  on  the  money  counts  for 
51/.  3s. 

7.  In  the  event  of  the  court  being  of  opinion  that  the  point  raised  must 
fail,  then  he  directed  that  a  verdict  be  entered  for  the  plaintiff  on  the  first 
count  for  40/.,  and  on  the  money  counts  51/.  3s. 

Horace  Broivn,  W.  G.  Harrison  with  him,  for  the  plaintiff. 

Baylis,  Q.  C,  T.  E.  Baylis  with  him,  for  the  defendant. 

Blackburn,  J.  I  think  that  when  we  get  over  the  difficulty  of  under- 
standing the  question  which  has  been  submitted  to  us  the  law  is  tolerably 
clear.  The  plaintiff  and  the  defendant  wrote  certain  letters,  and  had  cer- 
tain interviews  as  to  a  house  of  the  defendant,  and  the  result  of  these  let- 
ters and  interviews  was  that  the  plaintiff  proposed  to  take  a  lease  of  the 
house  if  the  defendant  would  carry  out  certain  improvements  and  alterations. 
Some  of  these  improvements  and  alterations  were  completed,  and  then  I 
think  the  case  finds  as  a  fact,  that  it  was  agreed  that  a  lease  should  be 
granted,  that  the  rest  of  the  alterations  should  be  executed  by  the  defend- 
ant, but  that  the  plaintiff  should  pay  7oZ.  towards  them.  The  first  question 
is,  whether  the  letters  between  the  plaintiff  and  defendant  are  a  sufficient 
memorandum  in  writing  to  enable  the  plaintiff  to  maintain  an  action  on  the 
agreement  to  grant  a  lease.  [The  learned  judge  referred  to  the  letters,  and 
expressed  his  opinion  that  they  were  insufficient  to  constitute  such  a  mem- 
orandum.] I  think,  therefore,  that  as  regards  that  part  of  his  claim  the 
plaintiff  is  not  entitled  to  recover. 

1  It  is  not  necessary  to  set  out  these  letters. 


SECT.  II  ]  PULBKOOK    V.   LAWES.  487 

But  then  comes  another  question.  The  plaintiff'  wished  to  have  the 
drawing-room  painted  in  a  particular  way,  and  the  defendant  consented 
that  the  plaintiff  should  send  in  his  own  workmen  to  paint  it,  and  ho 
accordingly  did  so.  It  is  &\id  by  Mr.  Baylis  that  this  painting  was  nut  one 
of  the  terras  of  the  agreement,  and  that  it  was  fanciful  painting  and  of  no 
benefit  to  the  house.  But  the  arbitrator,  no  doubt,  took  into  considera- 
tion the  question  whether  there  was  any  benefit  to  the  premises  or  not. 
He  says  "  The  plaintiff  wished  to  have  the  drawing-room  painted  in  a 
particular  way,  and  the  defendant  consented  that  he  should  send  in  his 
own  workmen  to  paint  it,  and  he  accordingly  did  so."  He  further  says, 
"Gas-pipes  were  laid  down  by  the  plaintiff,  and  certain  alterations  and  im- 
provements were  made  by  him  with  the  defendant's  knowledge  and  con- 
sent, and  with  a  view  to  the  plaintiff's  occupation  of  the  premises  ;  "  and, 
further,  "  In  anticipation  of  the  house  being  handed  over  to  him,  the  plain- 
tiff ordered  certain  gas-fittings,  cornices,  and  blinds  to  be  made  to  fit  the 
house,  and  paid  certain  sums  of  money  for  work  done  and  materials  pro- 
vided at  the  defendant's  request  for  decorating  the  drawing-room,  and 
making  the  agreed  alterations."  Then  follows  this  statement :  "  From 
divers  causes  the  alterations  and  suggestions  proposed  by  the  plaintiff  and 
agreed  to  be  done  by  the  defendant  were  so  long  in  being  carried  out  by 
the  defendant  (and  never  were  in  fact  fully  carried  out)  that  the  plaintiff 
■was  compelled  to  decline  to  take  the  house;  the  fittings  for  gas,  cornices, 
and  blinds,  which  he  had  had  expressly  made  for  the  house,  he  was  obliged 
to  sell  at  a  loss ;  and  the  money  he  paid  for  work  and  labor  done  at  the 
defendant's  request  was  also  lost  to  him."  This  statement  is  not  clearly 
expressed,  but  I  think  that  it  must  be  taken  to  mean  tliat  through  the 
defendant's  default  the  plaintiff  was  prevented  from  taking  possession  of 
the  house. 

Now,  if  the  plaintiff  had  gone  into  possession,  and  paid  75/.,  and  had 
afterwards  been  turned  out,  either  from  the  defendant's  default  or  in  any 
other  manner,  could  not  he  have  brought  an  action  to  recover  back  tiio 
751.  t  I  think  he  could,  for  it  was  money  the  consideration  for  which  had 
totally  failed.  Instead  of  this,  it  appears  that  in  the  present  case  the 
defendant  had  arranged  to  make  the  alterations  himself,  but  that  the 
plaintiff  did  part  of  them  in  his  place.  I  think  that  so  far  as  the  plaintiff 
did  the  work  instead  of  the  defendant,  it  was  equivalent  as  between  the 
parties  to  payment.  If  the  agreement  liad  continued,  the  plaintiff  could 
not  have  sued  for  the  75/.  ;  but  when  the  contract  goes  (»ff,  it  is  exactly  the 
same  thing  as  if  the  consideration  had  failed,  and  the  plaintiff  is  entitled 
to  recover  tiic  value  of  what  the  defendant  has  received  under  a  qunntnm 
meruit.  It  is  clear  that  he  is  entitled  to  recover  soincthing,  and  hero  tho 
arbitrator  has  fixed  the  amount.  Th<!  argument  <>f  Mr.  I'.aylis  is,  that  a.s 
the  agreement  is  one  concerning  an  interest  in  lan<l.  and  is  not  in  writing, 
it  cannot  be  given  in  evidence.     But  an  agreement  which  cjinnot  Iw  put 


488  PULBROOK   V.   LAWES.  [CHAP.  II. 

in  evidence,  sucli  as  an  unstamped  document,  may  be  looked  at  for  a  col- 
lateral purpose.  It  would  be  very  unjust  if  the  plaintiff  were  not  paid  for 
what  he  has  done  at  the  defendant's  request  simply  because  the  Statute  of 
Frauds  prevents  the  agreement  from  being  given  in  evidence,  and,  in  spite 
of  the  Act,  I  think  he  may  recover  under  a  quantum  meruit. 

Several  cases  were  cited  on  behalf  of  the  defendant.  One  of  these  is 
Cocking  V.  Ward.^  But  that  case  was  decided  before  the  Common  Law 
Precedure  Acts  came  into  operation,  and  when  there  was  not  the  same 
power  of  amending  the  special  count  as  there  is  now  ;  the  court,  however, 
held  that  the  plaintiff  might  recover  the  money  due  to  her  under  the 
count  for  accounts  stated.  Now  there  are  many  cases  which  establish  that 
no  account  can  be  stated,  unless  in  respect  of  a  debt.  In  Cocking  v.  Ward,^ 
there  could  not  be  a  count  for  land  sold  and  delivered,  and  they  had  to 
resort  to  a  subsequent  acknowledgment  to  support  the  count  for  accounts 
stated.  But  now-a-days,  when  a  liability  is  proved,  the  plaintiff  is  not 
defeated  through  a  mistake  in  his  pleadings ;  and  though  this  may  lead  to 
some  looseness,  I  think  it  is  much  more  calculated  to  promote  justice. 
Under  a  quantum  meruit  the  plaintiff  may  recover,  and  the  defendant  can- 
not retain  the  benefit  without  paying  the  price. 

Lusii,  J.  I  am  of  the  same  opinion.  The  f^icts  of  this  case  are  that  the 
defendant  agreed  to  grant  a  lease  of  a  house  to  the  plaintiff  for  seven, 
fourteen,  or  twenty-one  years,  and  it  was  at  first  part  of  the  agreement 
that  the  plaintiff  should  pay  151.  towards  certain  alterations  in  the  house. 
Afterwards,  the  defendant  agreed  that  the  plaintiff  should  send  in  his 
workmen  to  paint  the  drawing-room  in  a  particular  manner.  Now,  it  seems 
to  me  quite  clear  that  the  agreement  between  the  plaintiff  and  the  defend- 
ant was  never  expressed  in  writing  so  as  to  satisfy  the  Statute  of  Frauds. 
The  plaintiff  cannot,  therefore,  bring  an  action  on  the  agreement ;  but  the 
question  remains,  can  he,  under  the  common  counts,  recover  the  amount 
which  he  has  expended  on  the  house  according  to  the  finding  of  the  arbi- 
trator. Now,  it  seems  to  me,  that  what  the  plaiiitiff  did  was  very  much  as 
if  he  had  paid  the  lU.  into  the  hands  of  the  defendant  after  the  making  of 
the  agreement,  in  which  case  he  would  clearly  be  entitled  to  recover  back 
the  money.  I  cannot  see  that  the  fact  that  he  has  expended  the  money 
upon  the  improvement  of  the  house  with  the  consent  of  the  defendant  can 
make  any  difference. 

I  quite  feel  that  in  deciding  as  we  do,  we  are  going  counter  to  Hodgson 
V.  Johnson. 2  There  the  defendant,  tenant  of  a  brick-yard,  agreed  verbally 
with  the  plaintiff  that  the  plaintiff  should  go  into  possession,  taking  the 
plant  and  bricks  at  a  valuation,  and  the  defendant  was  to  pay  the  rent  due 
from  him.  It  was  held  that  the  plaintiff,  though  he  had  gone  into  posses- 
sion, and  had  his  goods  sold  under  a  distress,  coiild  not  recover  under  the 

1  1  C.  B.  858  ;  15  L.  J.  C.  P.  245. 

2  E.  B.  &  E.  685  ;  23  L.  J.  Q.  B.  88. 


^^^^-  I^]  GKEER    V.    GREER.  4S9 

n-reement  to  pay  the  rent,  as  it  was  not  in  writing.  But  the  only  point 
taken  before  the  court  was  whether  the  agreement  to  take  the  bricks  could 
be  seveied  from  the  agreement  as  to  the  occupation.  It  is  strange  tluit 
the  court  seems  to  have  overlooked  the  fact  that,  quite  independtnitly  of 
the  agreement  to  transfer  the  lease,  the  circumstances  of  the  oxse  origi- 
uated  a  claim  for  compensation.  If  the  point  were  to  arise  again,  I  am  hi- 
cliued  to  think  that  the  decision  would  not  be  followed.  This  being  so,  I 
think  the  plaintiff  is  entitled  to  recover  back  the  money  which  ho  has 
paid,  as  on  a  foilure  of  consideration. 

JuJt^umuljor  the  I'laintiff. 


NATHANIEL   S.   GREER  v.   AMOS   GREER. 
In  the  Supreme  Judicial  Court  of  Maine,  July  Term,  1840. 

[Reporled  in  18  Maine  Reports,  10.] 

The  action  was  assumpsit,  wherein  the  plaintiff  alleged  that  the  de- 
fendant became  surety  for  him  to  tlie  amount  of  839.07,  and  that  he  con- 
veyed to  the  defendant,  for  security  and  indemnity,  his  form  worth  $700  ; 
that  he  paid  the  debt  for  which  the  defendant  was  his  surety  ;  that  the 
defendant  afterwards  conveyed  the  farm  to  a  tliird  person  ;  that  he  re- 
quested the  defendant  to  re-convey  the  land,  and  that  ho  wholly  refused 
to  convey  to  the  plaintiff,  and  conveyed  the  laud  to  a  third  person.  There 
was  also  a  count  for  money  had  and  received. 

At   the   trial  before  Emery,  J.,  the  plaintiff  offered  to  prove,  that  on 
April  G,  1830,  the  plaintiff  conveyed  his  farm  to  the  defendant,  worth 
$700,  in  consideration  that  he  would  pay  to  Norris  a  debt  of  al)out  .?40, 
due  from  the  plaintiff,   it  being  then  agreed,  that   if  plaintiff  should'  in- 
demnify the  defendant  and  .save  him  haiinless  from  the  debt   to  Norris, 
that  the  defendant  should  re-convey  the  farm  to  the  plaintiff;  that  in  July, 
183G,  the  parties  met  at  the  house  of  a  m:igistrate  for  the  purpose  of  n>ak- 
ing  and  executing  a  re-conveyauce  of  the  farm,  they  then  agreeing  that  the 
plaintiff  had   fully   repaid   and    iiidenmili.>d   the  defendant  for  the  Norris 
del)t,  and  the  defendant  expressed  his  wilhiii,niess  to  execute  a  deed  to  the 
plaintiff,  and  it  being  incouvenieut  at  that  time  f..r  tlie  magistrate  to  j.re- 
pare  the  deed  the  parties  separated;  that  afterwards,  the  defendant  fre- 
qiently   admitted   that   h.;    had   been    fully    paid    and    indemnified   f..r  the 
Norris  debt,  an<l  agreed  to  execute  a  deed  of  the  land  to  the  plaint ilf  and 
to  fulfil  the  agreement  on  his  i)art ;  that  aftorward.s,  October  17,  IH.'lt],  the 
defendant  conveyed  the  same  farm,  by  deed  of  warninty,  to  one  Thomas, 
who  has  since,  by  j)rocess  at  law,  recovered  seizin  and  jiossession  thereof 
against  the  plaintiff;  that  in  pursuance  of  the  agreement,  the  magi-stnito 


490  GREER   V.    GREER.  [CHAP.  IL 

wrote  a  deed  from  the  defendant  to  the  plaintiff,  from  the  original  deed  left 
for  that  purpose  ;  and  that  the  defendant  came  afterwards  and  took  away 
the  old  deed,  and  said  that  the  plaintiff  had  not  behaved  well,  and  he 
should  not  execute  the  new  deed.  There  was  no  written  agreement  be- 
tween the  parties.  The  counsel  for  the  defendant  objected  to  the  admis- 
sion of  this  evidence  or  of  any  part  thereof,  on  account  of  its  not  being 
in  writing,  and  it  was  for  this  cause  excluded  by  the  judge.  A  nonsuit 
was  then  entered,  by  consent,  which  was  to  be  set  aside,  if  the  testimony 
should  have  been  admitted. 

J.  Williamson  for  the  plaintiff. 
W.  G.  Crosby  for  the  defendant. 
The  opinion  of  the  court  was  drawn  up  by 

Weston,  C.  J.  The  contract  upon  which  the  plaintiff  declares  is  void 
by  the  statute  of  frauds.  Where  the  party  who  would  avail  himself  of 
this  statute,  has  himself  been  guilty  of  fraud,  the  party  injured  may  often 
have  a  remedy  in  equity,  and  sometimes  at  law.  There  are  cases  where  a 
court  of  equity  would  decree  a  specific  performance,  when  the  estate  had 
not  been  previously  conveyed  to  a  bona  fide  purchaser,  without  notice.  And 
when  it  has,  a  decree  might  pass  against  the  fraudulent  party,  to  make 
compensation  in  damages. 

It  has  been  said,  that  where  a  court  of  chancery  would  decree  a  specific 
performance,  upon  a  parol  contract  for  the  sale  of  land,  on  the  ground  of 
fraud,  damages  might  be  recovered  at  law,  based  upon  such  fraud,  in  a 
proper  action  ;  but  not  assumpsit  upon  the  contract.  Boyd  v.  Stone.^  It 
is,  however,  there  stated,  that  "  no  instance  can  be  found  in  the  reports  of 
chancery  cases  of  a  specific  performance  decreed,  where  the  fraud  consisted 
only  of  a  breach  of  promise."  The  facts  offered  to  be  proved  present  a 
case  of  great  oppression.  Whether  any  relief  could  be  afforded  in  chancery, 
we  are  not  called  upon  to  determine.  We  are,  however,  quite  clear,  upon 
the  authorities,  that  the  plaintiff"  cannot  maintain  assumpsit,  upon  the  ex- 
press contract. 

We  are  further  of  the  opinion,  that  the  plaintiff  is  entitled  to  reclaim 
what  he  has  paid,  since  the  conveyance  of  the  land,  upon  an  assumpsit 
implied  by  law.  For  the  liability  undertaken  by  the  defendant  for  the 
plaintiff',  the  latter  put  property  into  his  hands  far  transcending  what  was 
wanted  for  his  indemnity.  When  the  defendant,  therefore,  paid  what  he 
had  assumed,  retaining  the  property,  and  being  thereby  more  than  reim- 
bursed, he  had  no  further  claim  upon  the  plaintiff".  The  payment  subse- 
quently made  by  him  was  to  re-purchase  the  estate  upon  the  parol  contract. 
It  was  upon  this  consideration  alone  that  the  defendant  could  equitably 
receive  or  retain  it.  These  parol  contracts,  although  not  legally,  are 
morally  binding,  and  payments  made  under  them  cannot  be  reclaimed,  so 
long  as  the  party  receiving  is  in  no  fault.     But  if  he  repudiates  the  contract, 

1  11  Mass.  342. 


SECT.  II.]  IIAWLEY    V.    MOODY.  491 

a  right  of  reclamation,  upon  the  principles  of  equity  and  good  conscience, 
accrues  to  the  other  party.  Here  the  defendant  ha.s  repudiated  the  contract, 
by  depriving  himself  of  the  power  of  fulfilment,  llichards  r.  Allen.*  Having 
a  second  time  received  of  the  plaintilf  what  he  iiad  paiil  for  liim,  he  holds 
the  sum  last  received  for  the  use  of  the  plaintitf ;  and  to  that  extent,  we 
are  satisfied  the  action  may  be  maintained,  if  the  case  stated  can  he  made 
out  in  proof.  A^oiisuit  stl  aside. 


ADDISON   D.   HAWLEY    v.   ELISHA   MOODY. 

In  the  Supreme  Couut  of  Vermont,  October  Term,  1852. 

[RtjwrttJ  in  24  Vermont  Reports,  603. J 

This  was  an  action  of  assumpsit.  Plea,  the  general  issue,  and  trial  by 
the  court. 

On  trial,  the  plaintiff  gave  evidence  tending  to  prove,  that  on  the  11th 
day  of  July,  1851,  he  contracted  with  the  defendant  for  a  lease  of  the 
defendant's  tavern-stand  in  Waterbury,  (called  the  Waterbury  House),  for 
one  year  from  and  after  the  first  day  of  September,  1851,  for  six  hundred 
dollars;  and  paid  the  defendant  at  the  time  one  hundred  dollars,  in  a  gold 
watch,  which  defendant  received  as  a  payment  of  one  hundred  dollars 
towards  the  rent.  And  it  was  further  stipulated  at  the  time,  that  the  par- 
ties should  meet  at  Mr.  Dillingham's  office  as  soon  as  he  returned  home 
(he  being  absent  that  day),  and  execute  a  written  lease.  The  contract  was 
all  in  parol.  The  plaintiff  called  upon  the  defendant  for  the  lease,  and  the 
defendant  soon  after,  on  the  same  day,  tendered  the  watch  back  to  the 
plaintiff,  which  the  plaintiff  refu.sed  to  receive,  and  the  watch  was  after- 
wards attached  by  one  of  the  plaintiff^'s  creditors,  and  sold  on  execution 
against  the  plaintiff. 

The  defendant,  on  the  14th  day  of  July,  1851,  leased  the  same  premises 
to  one  Howard  for  one  year,  and  declined  to  lease  them  to  the  jihiintilT. 
The  plaintiff  tendered  to  the  defendant,  on  the  first  day  of  September, 
1851,  five  hundred  dollars  in  specie,  and  demanded  a  lea.so  of  tlie  premises, 
according  to  the  contract,  which  defendant  declined. 

The  county  court,  March  term,  in  Washington  county,  1852,  Poland,  J., 
presiding,  —  adjudged  that  plaintifl'  could  not  recover,  and  rendered  judg- 
ment for  defendant.      Kxce[)tions  by  plaint  iff. 

T.  P.  liciljield  for  plaintiff. 

Peck  &  C'ldbi/  and  Dillinghavi  for  defendant. 

The  opinion  of  the  court  was  delivered  by 

Redfield,  J.  1.  The  statute  of  frauds  in  this  State  contains  no  excejv 
tion  of  leases,  or  contracts  for  Icjises  in  futuro,  as  is  found   in  tiic   Kuglish 

>  17  Maiiw,  230. 


492  HAWLEY   V.   MOODY.  [CHAP.  IL 

statute  and  in  some  of  the  other  States.     This  case  falls,  therefore,  within 
the  statute. 

2.  Part-performance  has  not  been  regarded  as  any  gi-ound  of  relief  at 
law ;  and  it  has  not  been  considered  that  part-payment  merely  amounted 
to  such  part-performance  as  to  entitle  the  party  to  enforce  the  contract  in 
equity  even,  or  not  generally. 

3.  The  only  question  then  is  in  regard  to  the  part-payment.  It  seems 
to  be  well  settled,  that  the  party  repudiating  the  contract  cannot  recover 
for  part-payment  under  it  ever,  but  that  the  other  party  may.  Shaw  v. 
Shaw.i 

To  this  extent  the  counsel  seem  to  understand  the  law  alike,  and  that 
would  settle  the  rights  of  the  parties  sufficiently,  were  it  not  that  they 
seem  to  stand  npon  ceremony  as  to  the  mode,  whether  the  party  making 
the  payment  in  a  specific  thing  is  bound  to  take  back  the  same  thing,  when 
the  contract  is  repudiated  by  the  other  party. 

There  can  be  no  doubt  the  property  passed  by  the  sale  and  delivery  to 
the  defendant,  the  only  question  is,  as  to  the  effect  of  defendant's  refusal 
to  fulfil  the  contract.  If  the  contract  could  be  regarded  as  originally  void, 
like  a  Sunday  contract,  then  no  property  would  pass,  until  a  reaffirmance 
on  some  other  day. 

But  here  the  contract  is  not  void,  as  was  expressly  held  by  this  court  in 
Philbrook  v.  Belknap.^ 

It  has  always  been  so  held,  whenever  the  question  has  arisen,  notwith- 
standing the  elementary  writers,  in  a  loose  way,  often  speak  of  this  class  of 
contracts  as  void,  meaning  thereby,  contracts  upon  which  no  action  will  lie. 
That  is  all  the  statute  provides,  "  That  no  suit  in  law  or  equity  shall  be 
maintained  upon  them."  But  to  all  intents  they  are  contracts,  and  per- 
fectly valid  for  all  purposes  except  actions,  so  long  as  they  are  acted  under. 
There  can  be  no  doubt  the  property  in  this  watch  passed  to  defendant, 
and  might  have  been  sold  by  him,  or  legally  attached  upon  his  debts. 

4.  The  only  remaining  inquiry  then  is  as  to  the  effect  upon  the  title  of 
the  watch,  of  defendant's  refusal  to  complete  the  contract.  If  this  were  to 
be  regarded  like  the  case  where  one  is  induced  to  purchase  property,  by 
fraudulent  representations,  and  where,  upon  the  discovery  of  such  facts,  he 
elects  to  rescind  the  contract,  as  he  may,  then  the  property  would  revest. 
But  here  is  no  fraud  in  the  contract,  neither  is  it  the  object  of  the  statute 
to  attach  to  this  class  of  contracts  any  mark  of  reproach. 

The  contract  is  innocent  enough,  if  each  party  chooses  to  trust  to  the 
honor  of  the  other  party  as  to  its  performance.  If  that  were  not  so,  one 
could  not  recover  for  payments  made  under  it.  The  contract  is  not  void, 
or  affected  with  any  taint  or  turpitude,  nor  is  it  rescindable  at  the  election, 
of  either  party. 

Either  party,  if  he  choose,  may  repudiate  it,  but  that  only  operates  upon 

1  6  Vt.  69.  2  6  Vt.  383. 


SECT.  II.]  IIAWLKY    V.    MOODY.  493 

SO  much  of  the  contract  as  remains  executory  at  the  time,  and  does  not 
repeal  anything  done  under  it.  For  these  purposes  it  remains  in  full 
force.  And  the  party  repudiating  must  be  content  to  lose  what  he  has 
done  under  it,  as,  the  contract  remaining  in  force,  the  other  party  may 
defend  under  it. 

But  if  the  party  repudiating  the  future  performance  has  himself  received 
advances  which  he  declines  to  pay  for  in  the  mode  stipulated,  it  is  regarded 
as  equitable  that  he  should  refund  in  the  usual  mode  for  money  had  and 
for  goods  sold,  and  it  is  not  in  his  power  without  the  consent  of  the  other 
party,  to  revest  the  title  of  the  specific  things  received. 

This  seems  to  us  the  only  view  consistent  with  general  priucij>les  appli- 
cable to  the  subject,  or  with  the  decided  cases,  and  manifestly  just  and 
equitable.  If  the  party  has  bought  goods  which  he  declines  to  pay  for  in 
the  mode  stipulated,  and  which  but  for  liis  own  act  he  might  do,  he  ought 
and  he  must  be  content  to  pay  in  the  usual  mode  of  paying  for  goods  sold 
and  delivered,  and  this  recovery  may  be  had  under  the  general  counts. 
Gray  v.   Hill.^ 

As  the  former  cases  upon  this  subject  have  adopted  no  principle  at  all 
analogous  to  allowing  either  party  the  power  of  rescission  of  the  contract,  wo 
feel  reluctant  to  push  ourselves  upon  an  unexplored  field,  without  some 
obvious  and  pressing  necessity,  in  order  to  warp  justice,  which  we  think  is 
not  this  case. 

By  the  adoption  of  this  new  feature,  even  if  it  were  more  consonant  with 
justice  in  the  particular  case,  which  we  think  it  clearly  is  not,  we  should 
be  fearful  of  ultimately  encountering  evils  which  are  not  apparent  at  the 
moment.  And  there  are  some  which  we  could  easily  foresee  might  arise. 
The  specific  things  received  in  payment  might  have  been  mi)ro  or  less  put 
to  use  by  the  party  receiving  them,  for  which  he  ought  to  bo  accountable. 

They  might  have  been  sold  and  transferred  in  different  modes,  and  thus 
new  rights  and  interests  intervene.  And  if  we  adopt  the  principle  of 
rescission,  we  do  not  see,  but  in  principle,  it  will  cut  off  by  the  roots  all 
rights  accrued  under  tlic  contract  before  reymdiation,  which  would  certainly 
be  unjust  to  the  innocent  party. 

And  as  the  repudiating  party  is  always  clearly  in  the  wrong,  it  can  bo 
no  hardship  upon  him,  to  pay  in  currency  for  what  he  has  received  in 
advance  upon  the  contract. 

If  one  party  has  the  power  of  rescission,  then  the  other,  and  especially  the 
innocent  party,  should  have  the  power.  The  result  of  wliith  mujst  l)o  tliat, 
however  many  times  the  property  has  changed  hands,  or  under  whatever 
circum.stances,  the  innocent  party  may  pursue  it  and  recover  of  tlio  last 
proprietor,  if  not  of  each  intervening  one,  which  would  often  be  attende<l 
with  serious  embarrassment  and  probable  wrong. 

Judgment  reversed  aud  case  remaivh-d  fur  urw  truil. 

J  1  i;.  &  M.  420;  Cliitty  on  ('ontmcts,  305. 


494  SMITH  V.   SMITH.  [CHAP.  II. 


JOSEPH   S.   SMITH   v.   THE  ADMINISTRATORS   OF  JOHIT  S. 
SMITH,   Deceased. 

In  the  Supreme  Court  of  New  Jersey,  February  Term,  1860. 

[Reported  in  4  Dutcher,  208.] 

This  cause  came  before  the  court  on  the  following  state  of  the  case, 
certified  from  the  Warren  circuit. 

This  suit  was  brought  by  the  plaintiff  against  the  defendants,  as  admin- 
istrators of  the  estate  of  John  S.  Smith,  deceased,  to  recover  the  cost  and 
expenses  of  erecting  a  dwelling-house  and  cow-shed  by  plaintiff  upon  a  farm 
of  the  deceased,  situate  in  the  township  of  Blairstown,  in  the  county  of 
Warren.  The  declaration,  besides  several  special  counts,  contained  the 
ordinary  common  counts. 

It  appeared  on  the  trial  that  the  said  deceased,  in  his  lifetime,  was  the 
owner  of  several  farms  situate  in  the  county  of  Warren  ;  that  the  plaintiff, 
■who  was  a  son  of  the  deceased,  had  lived  on  one  of  the  said  farms,  as  a 
tenant  from  year  to  year,  for  upwards  of  twenty-three  years  prior  to  the 
death  of  the  said  John  S.  Smith,  first  farming  the  same  on  shares,  and 
afterwai'ds  at  a  low  money  rent,  which  he  had  paid  regularly  to  within  a 
short  time  of  the  death  of  his  father;  that  the  other  farms  of  the  deceased 
were  also  occupied  by  his  other  sons  at  low  rents  ;  that  during  the  tenancy 
of  the  plaintiff'  the  dwelling-house  on  the  said  farm  became  greatly  dilapi- 
dated and  out  of  repair.  It  was  testified  to  by  the  plaintiff's  son  and  son- 
in-law,  that  in  the  year  1854,  the  plaintiff  applied  to  the  deceased  to  put  up 
a  new  dwelling-house  and  cow-shed  on  the  premises,  and  that  the  deceased 
said  that  the  house  was  getting  old,  and  a  new  one  was  needed  ;  and  that 
a  cow-shed  was  also  needed,  but  that  he  was  getting  too  old  to  build,  and 
had  no  horses  and  wagon  to  build  with,  and  told  the  plaintiff  to  go  on 
and  build  a  house  and  cow-shed  to  suit  himself;  and  that  the  plaintiff 
replied  that  he  would  not  build  on  an  uncertainty,  and  that  the  deceased 
told  the  plaintiff  to  go  on  and  build,  and  the  farm  should  be  his  :  and  it 
was  further  testified  to  by  Mary  Snyder,  that  the  deceased,  in  a  conversa- 
tion with  her,  said  that  the  plaintiff  wanted  him  to  build  a  better  house, 
and  he  thought  the  plaintiff  ought  to  have  a  better  house,  but  he  was  get- 
ting old,  and  had  done  all  the  building  he  would  ever  do — if  the  plaintiff 
■wanted  a  better  house  he  should  build  it  himself;  that  the  plaintiff  had 
replied  to  that,  that  he,  the  plaintiff,  did  not  want  to  build  on  an  uncer- 
tainty, and  he  did  not  know  who  he  was  working  for,  and  that  he,  the 
deceased,  had  told  the  plaintiff  to  go  on  and  fix  what  he  had  a  mind  to  — 
that  he  hud  left  it  to  him. 


SECT.  II.]  SMITH  V.    SMITH.  495 

It  further  appeared  in  evidence  tliat,  during  the  year  18o5,  the  phiiutiff 
built  on  the  said  farm,  at  his  own  expense,  a  dwelHng-house  and  cow-shed 
at  a  considerable  cost,  and  continued  to  occupy  the  farm  as  a  tenant  from 
year  to  year  until  the  death  of  his  father;  that  the  said  John  S.  Smith 
died,  in  December,  1856,  intestate,  without  conveying  or  devising  the  said 
farm  to  the  plaintiff,  and  that  the  said  farm,  with  the  otlier  lands  of 
the  deceased,  descended  to  his  six  heirs-at-law,  of  whom  the  plaintiff  was 
one. 

It  did  not  appear  in  evidence  that  the  said  agreement  was  reduced  to 
writing,  or  that  the  said  deceased  specified  the  size  of  the  buildings  or  the 
materials  to  be  used,  but  it  was  shown  in  evidence  that  the  deceased  was 
occasionally  on  the  premises  while  the  house  was  being  built,  and  that  ho 
expressed  himself  pleased  with  the  manner  in  which  the  plaintiff  was  put- 
ting up  the  building;  and  it  further  appeared  that  the  said  house  wais  a 
suitable  one  for  the  farm. 

It  also  appeared  in  evidence  that  the  said  farm,  as  occupied  by  plaintiff 
when  the  said  buildings  were  erected,  contained  about  one  hundred  acres 
of  land,  and  was  worth,  without  the  plaintiff's  improvements,  from  $3000 
to  $3500,  and  that  tlie  estimated  cost  of  the  said  building  was  from  $000 
to  81200. 

It  further  appeared  in  evidence  that,  after  the  death  of  the  said  John 
S.  Smith,  a  dispute  arose  concerning  the  granting  of  letters  of  adminis- 
tration upon  his  estate,  and  that,  for  the  purpose  of  settling  this  dispute 
and  dividing  the  real  estate  of  the  deceased  among  his  heii-s,  tlio  heirs-at- 
law  and  widow  of  deceased  entered  into  the  following  agreement  :  — 

"  Memorandum  of  an  agreement,  made  this  sixteenth  day  of  February, 
eighteen  hundred  and  fifty-seven,  between  Rachel  Smith,  widow  of  John  S. 
Smith,  late  of  the  township  of  Blairstown,  in  the  county  of  Warren,  and 
State  of  New  Jersey,  deceased,  and  Joseph  Smith,  Lewis  Smith,  Benjamin 
L.  Smith,  John  Snover,  and  Mary  his  wife,  formerly  Mary  Smith,  John 
Smith,  of  tiie  said  county,  and  Klisha  Smitli,  of  McComb  county,  .Michigan, 
all  heirs-at-law  of  the  said  John  S.  .Smith,  deceased.  Whereas  disputes  have 
arisen  between  the  said  widow  and  the  said  heirs-at-law  of  said  deceased  in 
relation  to  the  administration  on  the  estate  of  .said  deceased  and  the  n.ssigu- 
ment  of  dower  to  the  widow  of  said  di'cea.sed,  and  the  division  of  the  real 
estate  of  said  deceased  among  the  heirs-at-law  of  said  deceasi'il,  f..r  tiie 
purpose  of  amicably  settling  the  said  disputes  between  the  said  widow  ami 
lieirs,  and  among  the  said  heirs  themselves,  the  said  Kachel  .*>niith,  Joseph 
Smith,  Lewis  Smith,  Benjamin  L.  Smith,  John  Snover,  and  .Mary  hi.s  wife, 
John  Smith,  and  Elisha  Smith,  for  the  considemtion  of  the  sum  of  one 
dollar  to  each  by  the  other  in  hand  paid,  have  mutually  agreed  to  a  .settle- 
ment of  the  said  disputes  as  follows  :  — 

"First.  It  is  nnitually  agreed  that  the  said  Rachel  Smith,  the  widow 
of  the  deceased,  and  Williain  L.  Iloagland,  of  the  township  of  lilairstown, 


496  SMITH  V.  SMITH.  [chap.  II. 

shall  be  appointed  joint  administrators  of  the  estate  of  the  said  deceased, 
giving  bond  for  the  due  execution  of  their  offices  according  to  law. 

"  Second.  It  is  mutually  agreed  between  the  parties  that  Aaron  0.  Bartow 
and  John  H.  Blair,  of  Knowlton,  and  John  Shannon,  of  Elairstown,  in  said 
county,  shall  assign  and  set  off  to  the  widow  of  the  said  deceased,  her 
dower  in  the  lands  of  the  said  deceased,  and  that  any  assignment  of  dower 
to  said  widow,  made  in  writing  under  the  hands  of  the  said  Aaron  0. 
Bartow,  John  H.  Blair,  and  John  Shannon,  or  a  majority  of  them,  on  or 
before  the  thirtieth  day  of  April  next  (1857)  shall  be  binding  and  conclu- 
sive upon  the  said  parties  ;  and  that  the  said  widow  shall  enjoy  the  said 
lands  so  set  off  or  assigned  by  the  said  Aaron  0.  Bartow,  John  H.  Blair, 
and  John  Shannon,  and  hold  the  same  for  her  dower  in  the  same  manner 
and  for  the  same  estate  as  she  would  be  entitled  to  do  in  case  the  same  had 
been  set  off  by  any  court  having  jurisdiction  of  the  same  ;  and  the  said 
Rachel  Smith  shall  release  and  remise  all  her  right  and  claim  to  the  other 
lands  of  the  said  deceased  to  the  heirs-at-law  of  the  said  deceased,  as  the 
same  may  be  divided  among  them,  as  hereinafter  specified. 

"  Third.  It  is  mutually  agreed,  by  and  between  the  said  heirs-at-law  of 
the  said  deceased,  that  the  residue  of  the  said  lands  of  the  said  deceased 
■which  may  not  be  set  off  and  assigned  to  the  widow  of  tlie  said  deceased  as 
aforesaid  shall  be  partitioned  off  and  divided  among  the  said  heirs-at-law 
in  equal  shares,  by  the  said  Aaron  0.  Bartow,  John  H.  Blair,  and  John 
Shannon,  and  that  the  award  or  determination  of  the  said  Aaron  0.  Bartow, 
John  H.  Blair,  and  John  Shannon,  made  under  their  hands,  or  the  hands 
of  a  majority  of  them,  making  a  partition  or  division  of  the  said  last  named 
lands  among  the  heirs  of  said  deceased,  and  specifying  the  part  or  parcel 
thereof  to  be  held  by  each  one,  shall  be  binding  and  conclusive  on  the  said 
heirs,  and  that  the  said  heirs  shall  thei-eafter  each  hold  in  severalty  the 
part  or  share  of  the  said  lands  so  as  aforesaid  set  off  and  assigned  to  him  or 
her,  and  shall  mutually  execute,  each  to  the  other,  such  releases  and  con- 
veyances as  may  be  necessary  and  proper  to  vest  in  each  the  portion  cr 
parcel  of  said  lands  so  as  aforesaid  determined  and  specified  to  belong  to 
each  in  fee  simple  :  and  it  is  further  mutually  agreed,  by  and  between  the 
said  heirs,  that  the  said  partition  or  division  shall  be  made  on  or  before  the 
thirtieth  day  of  April  next  (1857),  and  that  as  soon  as  mutual  releases 
shall  be  exchanged  as  aforesaid,  each  shall  be  entitled  to  enter  immediately 
into  the  possession  and  enjoyment  of  the  part  or  parcel  so  assigned  and  set 
off  to  him  or  her,  reserving,  however,  to  the  persons  now  in  tlie  occupation 
of  the  said  premises  the  right  which  they  now  have  in  the  crops  standing 
or  growing  on  the  said  premises ;  pi'ovided  however,  that  the  share  or  paii; 
assigned  and  set  off  as  aforesaid  to  Mary  Snover,  wife  of  said  John  Snover, 
shall  be  so  assigned  and  specified,  by  the  said  Aaron  0.  Bartow,  John  H. 
Blair,  and  John  Shannon,  that  the  same  shall  extend  and  reach  to  some 
one  of  the  highways  upon  which  the  said  lands  lie. 


SECT.  II.]  SMITH  V.    SMITH.  497 

"  Fourth.  It  is  also  mutually  agreed,  by  and  between  the  said  heirs-at-law, 
that  if  the  said  partition  or  division  shall  be  made  among  the  said  heirs-at- 
law  as  aforesaid,  and  it  shall  subsequently  be  discovered  that  the  personal 
estate  of  the  said  deceased  shall  not  be  sufficient  to  pay  debts  and  expenses, 
so  that  it  shall  be  necessary  to  make  application  to  the  court  for  an  order 
to  sell  lands,  that  then  and  in  that  case  each  of  the  sixid  heirs  shall  and 
will  pay  to  the  administrators  of  the  said  deceased  an  equal  one-sixth  part 
of  the  deficit,  and  that  the  payment  of  the  same  by  each  one  shall  he  and 
remain  a  charge  upon  the  share  of  such  one  in  the  s;ud  lands  ;  and  further, 
that  the  expense  of  the  said  partition  and  assignment  of  dower  shall  be 
paid  equally  by  the  said  heirs. 

"  Fifth.  It  is  further  agreed  that  nothing  in  this  agreeineut  shiiU  bar  or 
release  any  claim,  debt,  or  demand  which  either  of  the  said  heirs  shall  have 
against  the  said  estate  of  the  said  deceased  ;  and  for  the  due  performance 
of  all  and  singular  the  matters  and  things  herein  contained,  the  parties 
hereto  bind  themselves  each  for  himself  or  herself,  but  not  fur  the  other, 
to  the  others,  their  heirs,  executors,  administrators  lirndy  by  these 
presents." 

"Which  agreement  was  signed  and  sealed  b}'  all  the  parties  therein 
named. 

It  further  appeared  in  evidence  that,  in  pursuance  of  the  above  agree- 
ment, the  said  Aaron  0.  Bartow,  John  H.  Blair,  and  John  Shannon  set  olf 
the  dower  of  the  widow,  and  made  a  division  of  the  residue  of  the  lauds  of 
deceased  among  the  said  heirs,  and  that  in  that  division  they  assigned  and 
set  off  to  the  plaintiff  twenty-seven  acres  and  fifty-eight  hundredths  from 
the  said  farm,  and  that  the  buildings,  for  the  recovery  of  the  cost  of  which 
this  suit  was  brought,  were  situate  on  the  part  assigned  to  plaintiff  in  tho 
said  division  ;  and  that  in  that  division  the  commissioners  made  to  tho 
plaintiff  no  allowance  for  the  buildings,  but  valued  tiie  lands  and  buildings 
together  as  part  of  the  estate  of  the  deceased,  and  that  the  plaintiff  after- 
wards sold  the  portion  set  off  to  him  for  the  sum  of  §2000. 

The  jury  rendered  a  verdict  for  defendant  by  direction  of  the  court. 
The  court  granted  a  rule  to  show  cause  why  there  should  not  be  a  new 
trial. 

"I,  Edward  W.  Wliolplcy,  judge  of  the  Circuit  Court  of  the  county  of 
Warren,  certify  tlie  case  to  t!ie  Sujireiue  Court,  for  its  advisory  opinion 
upon  the  following  poiut.s  :  — 

"  1.  Whether  there  was  any  evidenco  in  the  cause  from  whidi  tiic  j\ny 
could  lawfully  infer  a  promise  by  John  S.  Smith,  <lecoa.scd,  or  his  adminis- 
trators, since  his  death,  to  pay  for  the  improvements  in  money  or  out  of 
the  personal  estate  of  said  Smith. 

"  2.  Whether  the  agreement  to  leave  the  j.laintiff  the  farm,  or  give  it  to 
him  V)y  will  or  otlicrwisc,  was  within  the  statute  of  fniuds. 

"  ?}.    Whether  pluintiiV  entering  into  the  agreement  set  out,  and  receiving 

32 


498  SMITH  V.   SMITH.  [CHAP.  II. 

from  tlie  part  set  off  to  hitn  more  than  the  cost  of  his  improvements, 
does  not  prevent  the  arising  of  any  implied  promise  by  the  administrators 
to  pay  fur  the  improvements  which  might  have  been  raised  if  the  intestate 
had,  and  the  plaintiff  lost,  the  value  of  his  labor  and  materials. 

"  4.  Whether  the  vesting  of  the  land  on  which  the  buildings  were  erected 
in  the  plaintiff  by  descent  and  the  division  made  is  not  so  far  a  perform- 
ance of  the  intestate's  contract  with  the  plaintiff  as  to  be  a  bar  to  any 
action  for  the  non-performance  of  the  contract,  or  to  recover  back  the  con- 
sideration of  it,  to  wit,  the  value  of  the  plaintiff's  work,  labor,  and  mate- 
rials put  and  expended  upon  the  land  of  which  he  had  the  possession." 

Argued  at  November  term,  1859,  before  the  Chief  Justice  and  Justices 
Haines,  Vredenburgh,  and  Van  Dyke. 

Depue  and  Shipman  for  plaintiffs. 

Kennedy  and  Sherrard  for  defendants. 

The  opinion  of  the  court  was  delivered  by  the 

Chief  Justice.  The  contract  proved  upon  the  trial  of  this  case,  or  which 
the  evidence  tended  to  prove,  was  clearly  within  the  statute  of  frauds  and 
perjuries.  It  was  a  contract  for  the  transfer  of  an  interest  in  land. 
The  plaintiff,  who  was  tenant  from  year  to  year  of  his  father  (the  defendant's 
intestate),  erected  new  buildings  upon  the  demised  premises  upon  the 
authority  of  his  father,  who  told  the  plaintiff  "  to  go  on  and  build,  and  the 
farm  should  be  his,"  or,  as  another  witness  testified,  "  to  go  on  and  fix  what 
he  had  a  mind  to  —  he  had  left  it  to  him."  Tlie  evidence  in  the  cause 
would  have  warranted  the  jury  in  finding  that  the  plaintiff  erected  the 
buildings  with  the  consent  and  approbation  of  his  father,  upon  his  express 
promise  that  the  farm  should  be  his  upon  his  father's  death,  by  deed  or 
devise.  The  contract  to  transfer  the  land,  being  within  the  statute  of 
frauds,  was  void,  and  cannot  form  the  foundation  of  an  action.  The  plain- 
tiff, therefore,  clearly  could  not  sue  upon  the  special  contract. 

May  the  jury  lawfully  infer  a  promise  to  pay  for  the  improvements  in 
money  out  of  the  personal  estate  of  the  deceased  ]  It  is  clear,  from  the 
evidence,  that  the  erection  of  the  buildings  was  not  a  voluntary  service, 
nor  a  service  rendered  relying  upon  the  generosity  of  the  intestate  to  make 
compensation.  The  son  expressly  refused  to  proceed  with  the  buildings 
till  he  had  his  father's  promise  that  the  farm  should  be  his.  The  case, 
tiierefore,  does  not  fall  witliin  the  familiar  principle,  that  no  promise  can 
be  implied  to  pay  for  gratuitous  services  or  services  rendered  in  expecta- 
tion of  a  legacy.  Grandin  v.  Reading ;  ^  Johnson  v.  Hubbell ;  ^  Jacobson 
V.  Ex'rs  of  Le  Grange  ;  ^  Martin  v.  Wright  ;  *  Little  v.  Dawson.* 

But  will  the  law  raise  an  implied  promise  to  pay  money  when  there  was 
an  express  promise  to  pay  in  land  ]  The  answer  is,  that  the  promise  to 
pay  in  land  was  void,  and  therefore  no  promise.     If  the  plaintiff  had  erected 

1  2  Stock.  370.  2  2  Stock.  332.  3  3  Johns.  199. 

*  13  Wend.  460.  »  4  Dall.  111. 


SECT.  II.]  SMITH  V.   SMITH.  499 

the  buildings  upon  the  intestate's  land  at  his  request,  the  luw  would  have 
implied  a  promise  to  pay  for  them.  The  plaintift'  is  in  no  worse  situation 
because  the  defendant  made  an  express  promise  to  pay  for  the  services  in  a 
particular  mode,  which  promise  is  itself  a  nullity.  Tlie  true  principle,  says 
Mr.  Chief  Justice  Nelsox,  is  this  :  "The  contract  being  void  and  incapable 
of  enforcement  in  a  court  of  law,  the  party  paying  the  money  or  rendering 
the  services  in  pui'suance  thereof  may  treat  it  as  a  nullity,  and  recover  the 
money  or  the  value  of  the  services  rendered  under  the  common  counts. 
Tliis  is  the  universal  rule  in  cases  where  the  contract  is  void  for  any  cause 
not  illegal,  if  the  defendant  be  in  dofiiult."     King  v.  Brown.* 

The  principle  seems  to  be  perfectly  well  settled,  and  is  sustained  by  very 
numerous  authorities,  that  where  a  party  to  an  agreement  void  by  the 
statute  of  frauds  fails  to  execute  it,  the  price  advanced,  or  the  value  of  the 
article  delivered  in  part  performance  of  the  contract,  whether  in  money, 
labor,  or  chattels,  may  be  recovered  back.  Mavor  v.  Pyne  j''  Gray  v.  Hill ;' 
Gillet  V.  Maynard;*  Shute  v.  Dorr ;  ^  Lockwood  v.  Barnes;*  Abbott  v. 
Draper.'' 

In  all  such  cases  the  law  raises  by  implication  a  promise  to  repay  ad- 
vances made  upon  the  faith  of  the  contract,  and  for  which  no  consideration 
has  been  paid.  If,  as  a  consideration  for  the  improvement,  the  intestate 
had  agreed  to  devise  to  the  plaintift'  a  different  tract  of  laud  from  that  upon 
which  the  improvement  was  made  the  case  would  be  clear  of  difficulty.  But 
as  the  improvement  is  made  upon  the  farm  agreed  to  be  devised,  it  may 
be  urged  that  the  improvement  was  made  not  for  the  benefit  of  the  intes- 
tate, but  for  the  plaintiff's  own  benefit,  inasmuch  as  he  resided  upon  tho 
farm  during  his  life,  and  expected  to  receive  it  after  his  death. 

It  is  true  that  where  the  vendee  in  possession  under  a  parol  agreement 
for  the  purchase  of  land  makes  improvements  upon  the  premises,  he  cannot 
recover  the  value  of  such  improvements  in  an  action  at  law,  upon  tho  refusal 
of  the  vendor  to  fulfil  the  contract.     Gillet  v.  Maynard  ; '  Shreve  v.  Grimes.' 

The  improvements  in  such  case  are  not  made  at  the  instance  or  request 
of  the  vendor,  nor  for  his  benefit,  but  for  the  benefit  of  the  party  making 
them.  The  law,  therefore,  will  imply  no  promise  by  the  vendor  to  pay  for 
them.  But  thi.s  case  docs  not  fall  within  that  principle.  The  plaintiff  was 
not  in  possession  under  a  contract  for  the  land,  but  as  tenant  from  year 
to  year  paying  rent.  The  improvements  inured  to  tho  benefit  of  the  in- 
testate. He  might,  upon  the  completion  of  the  improvements,  have 
turned  the  plaintilT  out  of  possession,  or  demanded  and  received  an  in- 
creased rent  for  the  premises  during  his  life.  Ho  was  instrumental  in 
having  the  improvements  made.     The  plaintiff  refused  to  make  them  until 

1  2  Hill,  4SC.  2  3  Biiijr.  285.  »  Ify.  &  M.  420. 

*  r>.Iolin.s.  K.  85,  and  ea.sc.s  citt-il  in  noto  a.  »  5  Won.l.  204. 

8  3  Hill,  128.  '  4  Den.  51.  '  5  Jolm.s.  85. 

9  4  Littell,  224. 


500  WILLIAMS   V.   BEMIS.  [CHAP.  XL 

he  bad  his  father's  promise  that  the  land  shouhl  eveutually  be  his.  The 
improvements  were  not  only  made  by  the  procurement  of  the  intestate,  and 
for  his  use,  but  his  estate  has  actually  received  the  increased  value  of  the 
improvements  made  by  the  money  and  the  labor  of  the  plaintiff.  There 
seems  no  good  reason,  either  in  law  or  equity,  why  the  jury  may  not  infer 
a  promise  to  pay  for  them.  If  it  be  objected  that  the  evidence  in  the  cause 
admits  of  a  different  interpretation,  and  that  the  terms  of  the  contract 
were  different  from  those  above  stated,  the  answer  is,  that  what  is  really 
proved  by  the  evidence  was  a  question  of  fact,  and  should  have  been  sub- 
mitted to  the  jury. 

3.  The  legal  rights  of  the  plaintiff  under  the  contract  were  in  nowise 
affected  by  the  agreement  entered  into  among  the  heirs,  after  the  death 
of  John  S.  Smith,  for  the  settlement  of  the  intestate's  estate.  It  was  ex- 
pressly stipulated  that  nothing  in  the  agreement  fchouLl  bar  or  release  any 
claim  which  either  of  the  heirs  might  have  against  the  estate. 

4.  Neither  the  vesting  of  the  title  to  the  land  upon  which  the  buildings 
were  erected  in  the  plaintiff,  as  one  of  the  heii*s-at-law  of  the  intestate,  nor 
the  assignment  of  a  portion  of  the  farm  upon  which  the  buildings  were 
erected  to  the  plaintiff  under  the  agreement  among  the  heirs,  can  be  re- 
garded as  a  performance  of  the  intestate's  contract  with  the  plaintiff".  The 
plain  sense  of  the  agreement  was,  that  the  plaintiff  should  be  paid  for  his 
improvements ;  that  their  value  should  be  added  to  his  portion  of  the 
estate ;  that  he  should  have  the  fjirm  and  the  buildings.  The  agreement 
among  the  heirs  contemplates  an  equal  division  of  the  intestate's  estate 
among  all  the  heirs,  allowing  the  plaintiff  no  compensation  whatever  for 
his  improvements  more  than  he  would  have  received  as  an  heir-at-law  had 
the  impi'ovements  been  made  by  him  gi-atuitously  and  exclusively  for  his 
father's  benefit.  An  allowance,  it  is  true,  might  have  been  made  in  the 
division  of  the  estate  by  the  commissioners,  with  the  assent  of  the  heirs,  to 
the  plaintiff  for  his  improvements.  But  it  is  not  contemplated  in  the  agree- 
ment, and  whether  made  or  not  would  be  a  question  of  fact  for  the  jury. 

The  verdict  should  be  set  aside ;  and  a  new  trial  granted  and  the 
Circuit  Court  should  be  advised  accordingly. 


DANIEL  WILLIAMS  v.  JONAS   BEMIS,    Executor. 

In  the  Supreme  Judicial  Court  ok  Massachusetts,  October  Term,  1871. 

[Reported  in  lOS  Massachusetts  EejJOi-fs,  91.] 

Contract  for  work  done  and  materials  furnished  in  cultivating  the  laud 
of  Harvlin  Towne,  the  defendant's  testator.     Trial  in  the  Superior  Court, 


SECT.  II.]  ^VILLIAMS   V.   BEMIS.  501 

before  Scudder,  J.,  wlio,  before  verdict,  by  consent  of  the  parties,  uiaJe  :i 
report  of  the  case,  of  wliich  the  material  parts  were  as  follows  :  — 

"  The  plaiutitf  testified  tliat  the  work  was  done  and  the  materials  used 
by  him  upon  the  land  of  Towne  under  Towne's  jreneral  direction.  On 
cross-examination  he  testified,  against  his  own  objection,  that  before  he 
began  the  work  Towne  said  he  might  take  the  laml  for  one  year  and  plant 
it  with  potatoes,  and  he  would  furnish  one  half  the  seed  and  the  necessary 
dressing,  and  give  the  plaintiff  two  thii-ds  of  the  crop  ;  tliat  the  plaintitf 
declined  to  take  the  land  for  one  year  upon  the  terms  named,  telling  Towne 
that  the  labor  and  seed  to  be  furnished  by  him  would  cost  more  than  he 
could  get  for  it  the  first  year ;  but  that  he  told  Towne  he  would  take  the 
laud  and  do  the  work  on  it  for  two  years  for  two-thirds  of  the  crop  for  two 
years,  the  plaintiff  to  furnish  one  half  of  the  seed  and  all  the  labor,  and 
Towue  all  the  manure,  and  phosphate  if  necessary,  and  Towne  assented  ; 
that  the  work  named  in  the  declaration  was  done  under  the  contract  during 
the  first  year;  that  at  the  expiration  of  the  first  year  the  crop  of  that  year 
was  divided  according  to  the  contract,  the  plaintiff  taking  two-thirds  and 
Towne  one-third  thereof;  that  Towne  then  refused  to  allow  the  plaintiff  to 
plant  the  land  the  second  year;  and  that  the  work  done  and  seed  furnished 
and  used  upon  the  land  by  the  plaintiff  during  the  first  year  was  more  than 
was  necessary  for  the  first  year's  crop,  and  of  greater  value  than  the  plain- 
tiff's share  of  that  crop,  and  inured  to  the  permanent  benefit  of  the  land, 
and  of  the  crop  for  the  second  year,  as  was  understood  ami  anticipated  by 
the  parties  when  the  contract  was  entered  into  and  the  work  was  dune  and 
the  seed  used  upon  the  land." 

If  upon  this  testimony  the  plaintiff  was  to  recover  anything  beyond  the 
crop  already  received  by  him,  then  judgment  was  to  be  entered  for  the 
plaintiff  for  the  sum  of  $53.25,  otherwise  judgment  to  bo  entered  for  the 
defendant. 

G.  F.  H'jcir  and  W.  A.  Williams  for  the  plaintiff. 

F.  P.  Goulding  for  the  defendant. 

Ames,  J.  An  action  for  money  had  and  received  lies  to  recover  back 
money  paid  liy  a  party  to  an  agreement  which  is  invalid  by  the  statute  of 
frauds,  and  which  the  other  party  refuses  to  perform.  Cook  v.  Doggott  ;  ^ 
Basford  v.  Pearson  ; '^  Gillet  v.  Maynard.^  An  action  woid.l  also  lie  for  the 
return  of  any  article  delivered,  or  for  payment  for  labor  and  services  ren- 
dered, upon  such  an  agreement  and  under  such  circumstances.  Sherburne- 
V.  Fuller;*  Lane  v.  Shackford;*  IFolbrook  v.  Armstrouir."  Such  is  tuidoubt- 
edly  the  general  rule,  as  established  by  numerous  authorities.  "  Ccrfaiidy 
80  much  as  has  been  expended  by  the  plaintiff  in  money  or  laltor  may  l)0 
recovered  in  an  action  for  money  paid,  or  for  work  and  Iii])or  <li>ne,  for  the- 


1  2  Allen,  4-39.  »  9  Allon,  387.  •  R  .Tolin«.  85. 

<  5  Mass.  133.  »  6  N.  H.  130.  "1  Fuirf,  31, 


502  WILLIAMS   V.   BEMIS.  [CHAP.  XL 

defendant."  Kidder  v.  Hunt ;  ^  Shute  v.  Dorr.^  "  The  true  principle  is 
this  :  the  contract  being  void  and  incapable  of  enforcement  in  a  court  of 
law  "  (the  defendant  having  refused  to  perform  it),  "  the  party  paying  the 
money,  or  rendering  the  services  in  pursuance  thereof,  may  treat  it  as  a 
nullity,  and  recover  the  money  or  value  of  the  services  under  the  common 
counts."  King  v.  Brown,*  per  Nelson,  C.  J.  In  Gray  v.  HilV  Best,  C.  J., 
held  that  where  the  defendant,  in  consideration  of  certain  repairs  to  be 
made  by  the  plaintiff,  agreed  to  assign  a  lease  to  him,  and  after  the  repairs 
were  made  refused  to  make  the  assignment,  and  set  up  the  statute  of  frauds 
as  a  defence,  the  law  implied  a  pi-omise  to  pay  for  the  repairs,  and  this 
implied  promise  was  "  not  touched  by  the  statute."  See  also  Van  Deusen 
V.  Blum.* 

The  defendant  insists  that  the  work  was  done  by  the  plaintiff  in  the 
cultivation  of  crops  which  were  to  be  partly  his  own,  and  was  not  done 
upon  the  credit  of  Towne,  or  with  any  expectation  of  charging  it  against 
him.  Such  undoubtedly  was  the  understanding  of  the  parties  originally. 
But  as  Towne  saw  fit  to  say  that  the  special  contract  was  not  binding  upon 
him,  it  cannot  be  set  up  by  his  executor  as  binding  upon  the  plaintiff. 
King  V.  Welcome.^  It  cannot  be  treated  as  a  nullity  for  one  purpose,  and 
as  a  contract  for  another.  It  required  two  years  for  its  completion,  and 
both  parties  understood  that  there  was  to  be  no  profit  or  advantage  to  the 
plaintiff  except  from  the  operations  of  both  years  taken  together.  A  large 
part  of  the  labor  and  expense  incurred  in  the  first  year,  had  no  reference 
whatever  to  the  operations  and  results  of  that  year,  takeu  by  itself,  but 
were  a  preparation  of  the  land  for  increased  productiveness  in  the  second 
year.  The  plaintiff  must  be  considered  as  having,  in  that  way,  paid  in 
advance,  in  part  at  least,  for  the  privilege  of  using  the  land  the  second  year 
in  the  manner  agreed  upon.  By  the  repudiation  of  the  contract,  he  has 
lost  the  privilege  which  he  had  so  paid  for.  The  consideration  upon  which 
he  made  that  payment  has  failed  by  the  wilful  act  of  the  other  party  to 
the  contract,  and  he  is  therefore  entitled  to  recover  back  what  he  has  so 
paid.  Basford  v,  Pearson.'  If  it  had  been  a  payment  in  money,  it  would 
be  too  plain  to  be  controverted.  A  payment  in  labor  and  services,  of  which 
the  other  has  secured  the  benefit,  stands  upon  the  same  ground. 

Judgment  frjr  the  plai7itiff for  the  sum  agreed. 

1  1  Pick.  328,  33L  2  5  Wend.  204.  »  2  Hill,  485,  487. 

*  Ry.  &  M.  420.  *  18  Pick.  229.  «  5  Gray,  41. 

1  9  Allen,  387. 


SECT.  II.]  DAY   V.   NEW   YORK   CENTRAL   R.  R.  CO.  503 


OLIVER    H.   DAY,    Respondent,   v.   THE    NEW    YORK    CENTRAL 
EAILROAD   COMPANY,    Appellant. 

Ln  the  Commission  of  Appeals  of  New  York,  March  Term,   1873. 

[Reported  in  51  New  York  Reports,  583.] 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme  Court  in  the 
eighth  judicial  district,  affirming  a  judgment  in  favor  of  the  plaintiff, 
entered  upon  a  verdict. 

The  complaint  contained  two  causes  of  action  ;  and  for  the  first  cause 
alleged  in  substance  that  in  May,  1855,  the  plaintiff  agreed  to  convey  to 
the  defendant  about  an  acre  and  two-thirds  of  an  acre  of  land,  together 
with  the  right  of  ingress  and  egress,  to  and  from  the  land  so  to  be  con- 
veyed, to  the  plaintiffs  land,  and  to  build  and  keep  in  repair  cattle  yards 
and  pens  for  live  stock,  sufficient  to  accommodate  the  shippijig  or  trans- 
porting such  stock  to  and  from  the  cars  to  the  plaintiffs  land,  adjoining 
the  laud  so  to  be  conveyed,  free  from  any  expense  to  the  defendant ;  and 
that  the  defendant  should  temporarily  deliver  to  the  plaintiff,  from  that 
time  forward,  for  temporarily  keeping  and  feeding,  all  the  cattle,  swine 
and  live  stock  which  should  be  transported  on  its  road  eastward  from  the 
Niagara  River,  the  profits  of  such  keeping  and  feeding  to  be  realized  by  the 
plaintiff;  that  the  defendant,  for  that  purpose,  requested  the  plaintiff  to 
build,  make,  and  construct  the  necessary  yards,  pens,  and  so  fortli,  for  the 
temporary  feeding  and  keeping  such  live  stock  ;  that  a  conveyance  of  the 
land  was  made  by  the  plaintiff  to  the  defendant,  and  the  necessary  yards, 
pens,  and  other  conveniences  for  doing  business,  contemplated  by  the  agree- 
ment, were  constructed  by  the  plaintiff;  that  tlie  defondmt  disregarded 
the  agreement  entered  into  on  its  part,  and  refused  to  allow  the  live  stock 
transported  on  its  road  to  be  delivered  temporarily  to  the  plaintiff  for  feed- 
ing and  keeping,  and  refused  to  allow  the  [)liiiiitiff  the  eujoyrnout  of  the 
profits  he  would  have  realized  by  keeping  and  feeding  sncli  stock. 

The  second  cause  of  action  was  an  indebitatus  assumpsit  f<>r  l:ind  sold 
and  conveyed,  for  a  right  of  way  for  use  and  occupation  of  land  ami  prem- 
ises, for  work  and  labor,  care  and  diligence,  and  for  materials  furnished, 
and  for  construction  of  cattle  yards,  etc.,  for  the  defendant. 

The  answer  was  a  general  denial. 

The  first  cause  of  action  only  was  contained  in  the  ori;,'iu;d  complaint, 
and  the  action  was  tried  on  tliat  issue  in  November,  1H.''»S,  and  a  verdict 
rendered  for  the  plaintiff  for  $4.^8i.  On  appeal  to  the  Oeneral  'lerm,  a 
new  trial  was  ordered,  on  the  ground  tliat  the  agreement  on  the  part  of 


504  DAY   V.    NEW   YORK   CENTRAL    R.  R.  CO.  [CHAP.  II. 

the  appellant,  being  verbal  only,  was  void  by  the  statute  of  frauds,  for  the 
reason  that  it  was  not  to  be  performed  within  one  year,  and  also  that  it 
created  a  negative  easement  on  the  lauds  of  the  plaintiff.^ 

The  plaintiff  then  amended  his  complaint,  adding  thereto  the  second 
count,  and  a  second  trial  was  afterward  had,  and  a  verdict  recovered  by 
the  plaintiff  in  1867  for  $2500.  On  a  second  appeal  to  the  General  Term, 
a  new  trial  was  ordered  on  the  ground  that  the  damages  should  have  been 
confined  to  the  value  of  the  land  conveyed  by  the  plaintiff.^ 

On  the  third  and  last  trial,  damages  were  recovered  only  for  the  actual 
value  of  the  land  conveyed  by  plaintiff  to  the  defendant,  with  the  interest. 

On  the  last  trial,  the  plaintiff  gave  evidence  tending  to  prove  the  parol 
agreement  alleged  in  the  first  count  of  the  complaint,  and  that  the  plaintiff 
and  his  wife,  on  the  9th  day  of  July,  185-5,  executed  and  delivered  to  the 
defendant  a  deed  of  the  land,  which  also  contained  a  grant  on  their  part 
to  the  defendant  of  the  right  of  ingress  and  egress  to  and  from  the  land 
thereby  conveyed  over  and  across  the  land  of  the  plaintiff,  to  the  public 
highway  northwardly,  in  such  place  or  places  as  might  be  convenient  or 
iieuessaiy  to  load  or  unload  cattle,  horses,  sheep,  swine,  or  any  other  animal 
from  said  highway  on  to  or  off  of  the  cars  on  to  the  railroad  track  of  the 
defendant  built  on  the  land  thereby  conveyed  ;  and  the  deed  also  con- 
tained a  covenant  on  the  part  of  the  plaintiff  to  build  and  keep  in  repair 
all  the  cattle  yards  and  pens  for  stock,  swine,  sheep,  etc.,  that  might  be 
wanted  to  accommodate  shipping  or  transferring  to  or  from  the  cars  on  his 
land  adjoining  the  land  thereby  sold  and  conveyed,  free  from  any  expense 
to  the  defendant. 

The  plaintiff  also  proved  that  he  made  the  erections  contemplated  by 
this  deed  in  the  summer  of  1855.  and  that  the  defendant  laid  down  a  track 
on  the  land  conveyed,  and  that  the  live  stock  going  eastward  was  brought 
in  the  cars  and  unloaded  into  his  yards  ;  that  the  business  proceeded  thus 
till  the  spring  of  1856,  when  the  defendant  built  yards  and  pens  on  its  own 
land,  and  that  thereafter  some  of  the  stock  was  unloaded  at  the  plaintiff's 
and  some  at  the  defendant's  yards. 

The  plaintiff  testified  that  the  only  consideration  he  got  for  his  deed  was 
one  dollar  and  the  parol  agreement  set  forth  in  the  first  count  of  the  com- 
plaint on  the  part  of  defendant,  and  that  he  realized  in  the  years  1855  and 
1856  profits  from  the  stock  brought  by  the  defendant  to  his  yards  upward 
of  .S6000.     The  action  was  commenced  November  30,  1857. 

The  defendant  moved  that  the  plaintiff  be  nonsuited  upon  the  following 
grounds :  That  the  agreement  set  forth  in  the  first  cause  of  action  being  by 
parol,  was  void  ;  that  the  agreement  was  for  a  monopoly  of  the  business, 
and  the  court  should  not  enforce  it ;  that  the  plaintiff  could  not  recover  on 
the  second  cause  of  action  for  the  improvements  made  on  his  own  premises  ; 
that  the  plaintiff  cannot  recover  for  the  value  of  the  agreement  to  give  the 

i  31  Bavb.  548.  "  53  Barb.  250. 


SECT.  II.]  DAY   V.   NEW    YORK   CENTRAL   E.  R.  CO.  505 

plaintiff  the  business  of  yarding  and  feeding  hogs  and  cattle,  for  this  would 
be  another  mode  of  recovering  damages  for  the  breach  of  the  alleged  agree- 
ment. Also  upon  other  grounds  which  are  included  substantially  in  the 
requests  to  charge,  hereinafter  stated.  The  court  denied  the  motion,  and 
the  defendant  excepted. 

The  defendant's  counsel  requested  the  court  to  charge  the  jury  that  the 
plaintiff  could  not  recover  the  value  of  the  land  conveyed,  (1)  because  the 
defendant  never  agreed  to  purchase  it  or  to  pay  any  consideration  for  its 
couveyauce  ;  (2)  because  he  must  first  rescind  the  agreement  and  restore 
what  he  has  had  under  it,  to  wit,  the  enjoyment  of  the  stock  business  for 
two  years,  and  tlie  conseinient  profits  thereof;  (3)  because  there  must  be 
a  total  failure  of  consideration  for  the  conveyance  to  enable  the  plaintiff  to 
recover;  (1)  because  he  cannot  rescind  the  contract  in  part  and  allirm  it 
in  part ;  (5)  because  to  recover  under  the  common  counts  the  plaintiff 
nust  first  restore  what  he  has  acquired  of  the  defendant.  The  court 
refused  so  to  instruct  the  jury,  and  the  defendant's  counsel  excepted. 

The  defendant's  counsel  also  requested  the  court  to  instruct  the  jury 
that  if  both  parties  had  performed  the  agreement  in  part  the  plaintiff  could 
not  maintain  the  second  cause  of  action,  in  case  the  jury  found  he  had 
received  any  honelit  from  defendant's  partial  performance;  also,  that  the 
plaintiff  could  not  recover  unless  the  jury  found  that  he  had  not  received 
any  consideration  for  the  conveyance  of  the  land  ;  that  proof  of  a  partial 
failure  of  consideration  would  not  support  such  a  cause  of  action  ;  also, 
that  the  consideration  of  one  dollar,  expressed  in  the  deed,  and  the  express 
covenant  to  do  the  things  specified  "free  of  any  expense  to  the  railroad 
company,"  deprived  the  plaintiff  of  the  right  to  maintain  the  cause  of 
action  secondly  set  forth  ;  also,  that  if  they  found  that  the  plaintiff  was 
entitled  to  recover,  he  could  recover  only  such  sum  as,  together  with  tlio 
benefit  he  had  received  by  the  partial  performance  on  the  part  of  the 
defendant,  would  remunerate  him  for  the  value  of  the  land  ho  conveved  ; 
that  the  amount  of  the  profits  made  by  the  plaintiff  out  of  the  business 
during  the  time  the  defendant  performed  the  agreement  on  its  part  must 
be  deducted  from  the  value  of  the  land  conveyed  ;  also,  that  if  the  profits 
realized  by  the  plaintiff  from  the  business  furnished  by  tiie  defendant  at 
his  yards,  exceeded  or  equalled  his  expenditures  for  imj)rovemouts  and  the 
value  of  the  land  conveyed,  he  could  not  recover;  also  that,  in  determining 
t!ie  amount  of  the  damages,  the  jury  had  the  riglit  to  take  into  considera- 
tion the  benefits  the  plaintiff  had  derived  from  the  partial  perfdrmance  by 
tlie  defendant  of  the  contract. 

The  court  refused  each  rc(piest,  and  defendant  excepted. 

The  court  charged  the  jury,  in  substance,  that  tlie  plxintitf  could  not 
recover  upon  the  first  cause  of  action,  for  the  reason  that  the  agreement 
therein  set  forth  was  void  under  the  statute  of  frauds,  but  that  he  cnuM 
recover  on  the  cause  of  action  secondly  set  forth,  if  the  jurj'  found  the  facts 


506  DAY   V.    NEW   YORK    CENTBAL   R.  R.  CO.  [CHAP.  II, 

in  respect  to  the  contract  to  be  as  the  plaintiff  claims,  provided  they  also 
found  that  the  plaintiff  had  complied  with  and  performed  the  contract  on 
his  part  and  the  defendant  had  broken  and  refused  to  perform  the  same, 
and  if  they  so  found,  then  the  damages  to  which  the  plaintiff  would  be 
entitled  would  consist  of  the  value  of  the  land  granted  to  the  defendant  by 
the  plaintiff,  including  the  right  of  way  granted  by  the  deed,  as  actually 
appropriated  and  used  by  defendant,  and  interest  on  such  value. 

That  the  plaintiff  could  not  recover  any  damages  in  this  action,  unless 
it  was  proven  to  their  satisfaction  that  the  agreement  on  the  part  of  the 
defendant,  was  made  as  the  consideration  of  the  deed  from  the  plaintiff  to 
the  defendant.  The  defendant  excepted  to  the  charge  that  the  plaintiff 
could  recover  for  the  value  of  the  land,  or  for  the  value  of  the  right  of  way. 
The  jury  rendered  a  verdict  for  $828.58. 

John  Ganson  for  the  appellant. 

A.  R.  Potter  for  the  respondent. 

Earl,  C.  The  point  was  not  taken  by  the  defendant  at  any  stage  of  the 
trial,  that  the  plaintiff  had  not  given  sufficient  proof  tending  to  establish 
the  parol  agreement  claimed  by  him,  to  wit :  That  in  consideration  of  the 
conveyance  of  the  land  to  the  defendant,  it  was  to  give  to  the  plaintiff  at 
his  yards  and  pens  the  business  of  temporarily  keeping  and  feeding  all  the 
stock  which  should  be  transported  upon  its  road  eastward  from  Niagara 
River.  Hence  we  must  assume,  for  the  purposes  of  the  appeal,  that  the 
parol  agreement,  as  testified  to  by  the  plaintiff,  was  established.  We  must 
also  assume  that  this  agreement  was  void  under  the  statute  of  frauds,  for 
such  is  the  claim  on  the  part  of  the  defendant,  and  it  was  upon  this  theory 
alone  that  the  recovery  was  based,  and  upon  it  alone  the  plaintiff  seeks  to 
uphold  the  judgment.  As  the  consideration  for  the  plaintiff's  land,  the 
defendant  agreed  to  pay  him  one  dollar  and  to  give  him  the  stock  business 
at  his  yards.  It  paid  him  the  one  dollar  and  gave  him  all  the  business  for 
the  year  1855  and  part  of  it  for  the  year  1856,  and  out  of  this  business  the 
plaintiff  made  profits  to  the  amount  of  about  $6000.  And  yet  he  brings 
this  action  to  recover  the  entire  value  of  the  land  conveyed  by  him  on  the 
ground  of  a  total  failure  of  the  consideration  of  his  conveyance.  A  mere 
statement  of  the  case  shows  that  the  action  must  be  without  foundation. 

If  one  pays  money,  or  renders  service,  or  delivers  property  upon  an 
agreement  condemned  by  the  statute  of  frauds,  he  may  recover  the  money 
paid,  in  an  action  for  money  had  and  received,  and  he  may  recover  the 
value  of  his  services  and  of  his  property  upon  an  implied  assumpsit  to  pay, 
provided  he  can  show  that  he  has  been  ready  and  willing  to  perform  the 
agreement,  and  the  other  party  has  repudiated  or  refused  to  perform  it. 
Gillet  V.  Maynard  ;  ^  King  v.  Brown ;  ^  Cook  v.  Doggett ; '  Erben  v.  Loril- 
lard  ;  *  Richards  v.  Allen.® 

1  5  Johns.  85.  «  2  Hill,  439.  «  2  Allen,  439. 

*  19  N.  Y.  299.  6  17  Me.  296. 


SECT.  II.]       DAY  V.    NEW  YORK  CENTRAL  R.  R.  CO.  507 

While  the  law  in  such  case  will  not  sustain  an  action  based  upon  the 
agreement,  it  still  recognizes  its  existence  and  treats  it  as  morally  l)inding, 
and  for  that  reason  will  not  give  relief  ag-ainst  a  party  not  in  dcf:\ult,  nor 
in  favor  of  a  party  who  is  in  default  in  his  performance  of  the  agreement. 

A  party  who  has  received  anything  under  such  an  agreement,  and  then 
has  refused  to  perform  it,  ought  in  justice  to  pay  for  what  he  has  received, 
and  hence  the  law  for  the  purpose  of  doing  justice  to  the  other  party  will 
imply  an  assumpsit. 

An  assumpsit  is  never  implied  except  where  the  justice  and  o(]uity  of  the 
case  demand  it.  A  party  entering  into  an  agreement,  invidid  under  the 
statute  of  frauds,  is  charged  with  knowledge  that  he  cannot  enforce  his 
agreement,  and  if  he,  not  being  in  default,  has  received  part  of  the  con- 
sideration of  his  agreement,  upon  what  principle  of  justice  or  equity  will 
the  law  imply  an  assumpsit  on  the  part  of  the  party  in  default  still  to  pay 
the  entire  consideration  1  Yet  such  an  assumpsit  has  been  enforced  in  this 
case. 

Suppose  one  agree  by  parol  to  work  for  another  for  ten  years  for  the 
consideration  of  $500,  to  be  paid  at  the  end  of  that  time,  and  also  a  piece 
of  land  to  be  conveyed  to  him,  and  at  the  end  of  the  time  the  $500  be 
paid  and  the  conveyance  of  the  land  refused,  can  he,  upon  an  implied 
assumpsit,  recover  the  entire  value  of  his  services  1  If  he  has  received  no 
part  of  the  consideration  agreed  to  be  paid  to  him,  tlie  law  will  imply  a 
promise  to  pay  him  what  his  services  are  worth,  and  will  enforce  such 
promise.  But  what  shall  be  done  when  he  has  received  part  of  tlic  con- 
sideration 1  He  should  not  bo  left  without  any  remedy  for  the  balance 
honestly  due  him,  but  upon  the  same  principles  of  justice  and  equity  the 
law  should  imply  a  promise  to  pay  the  balance. 

Here  the  plaintiff  was  to  receive  for  his  land  one  dollar  and  the  stock 
business  at  his  yards.  The  one  dollar  may  I)e  regarded  nr  merely  nonn'nal, 
and  the  other  must  be  held  to  be  the  substantial  consideration.  The 
plaintiff  expected  to  get  the  value  of  his  land  in  the  profits  which  he  should 
make  out  of  the  business  which  the  defendant  should  give  him.  This 
business  the  defendant  gave  to  the  plaintiff  for  one  year,  at  leayt,  just  as 
it  agreed  to,  and  out  of  it  the  plaintiff  nppears  to  have  made  profits  much 
greater  than  tlie  value  of  the  land  conveyed.  These  profits  were  the  very 
consideration  contemplated  by  the  parties  for  the  conveyance  of  the  land, 
and  to  the  extent  that  the  plaint  iff  lias  liad  the  business  and  profits,  he  has 
had  the  very  consideration  lie  contracted  for.  Suppose  the  defendant  had 
agreed  to  pay  plaintiff  $100  and  also  to  give  him  the  stock  business,  couM 
the-  plaintiff  in  this  action  iifter  receiving  the  $100  recover  tlio  whole  value 
of  the  land,  entirely  ignoring  the  money  payment?-  Suppose,  instead  of 
giving  the  defendant  land,  the  plaintiff  had  paid  it  money  n)r  the  Kanie  con- 
sideration, could  he,  under  the  circuniHtances  of  this  case,  recover  liack  all 
the  money  paid  in  an  action  for  money  had  and  received  1     Clearly  not. 


508  DAY    V.    NEW    YORK    CENTRAL   K.  R.  CO.  [CHAP.  II. 

The  very  basis  upon  which  the  action  rests  forbids  it.  As  said  by  Lord 
Mansfield,  iu  Moses  v.  Macferlan/  "  if  the  defendant  be  under  an  obligation 
from  the  ties  of  natural  justice  to  refund,  the  law  implies  a  debt,  and  gives 
this  action  founded  in  the  equity  of  the  plaintiff's  case."  And  he  says  the 
action  "is  equally  beneficial  to  the  defendant.  It  is  the  most  favorable 
way  in  which  he  can  be  sued  ;  he  can  be  liable  no  further  than  the  money 
he  has  received ;  and  against  that  may  go  into  every  equitable  defence 
upon  the  general  issue ;  he  may  claim  every  equitable  allowance  ;  he  may 
prove  a  release  without  pleading  it ;  in  short,  he  may  defend  himself  by 
everything  which  shows  that  the  plaintiff,  ex  cequo  et  bono,  is  not  entitled  to 
the  whole  of  his  demand  or  to  any  part  of  it."  And  in  Longchamp  v. 
Kinny,^  the  same  learned  judge  says  :  "  Great  benefit  arises  from  a  liberal 
extension  of  the  action  for  money  had  and  received,  because  the  charge  and 
defence  in  this  kind  of  action  are  both  governed  by  the  true  equity  and 
conscience  of  the  case."  It  would  be  against  both  equity  and  good  con- 
science to  allow  the  plaintiff  in  the  case  supposed  to  recover  all  the  con- 
sideration vhich  he  had  paid,  when  he  had  already  received  a  part  of  the 
benefit  and  consideration  which  he  had  contracted  for.  Within  the  prin- 
ciples laid  down  in  the  cases  cited  he  would  be  permitted  to  recover  the 
balance  only  of  the  money  paid  by  him  after  deducting  the  value  of  so 
much  of  the  consideration  as  he  had  received,  and  if  it  could  be  shown  in 
such  case  by  the  defendant  that  plaintiff  had  actually  received  from  the 
defendant  upon  the  agreement  more  than  he  had  paid,  there  would  be  no 
basis  of  law  or  equity  for  the  action  to  stand  on.  The  same  principles  of 
justice  and  equity  should  be  applied  to  this  case.  The  plaintiff's  equities 
can  be  no  greater  that  he  paid  in  land  rather  than  in  money.  The  agree- 
ment cannot  be  enforced.  Neither  party  can  in  this  action  be  allowed  any 
benefit  from  it  or  any  damage  for  its  breach.  The  defendant  having 
repudiated  the  agreement,  the  plaintiff  can  recover  for  his  land  as  if  there 
had  been  no  agreement  as  to  the  amount  of  the  consideration,  but  he  must 
allow  so  much  of  the  consideration  as  has  been  paid  ;  and  if  he  has  received 
more  in  the  profits  of  the  business  which  the  defendant  brought  to  him 
under  the  agreement  than  the  value  of  his  land,  he  can  recover  nothing. 
If  the  profits  are  less  than  the  value  of  the  land,  then  he  can  recover  the 
balance. 

It  was  not  necessary  for  the  plaintiff  to  tender  the  profits  to  the  defend- 
ant before  the  commencement  of  the  action.  They  were  part  of  the  con- 
sideration received  by  him  for  his  conveyance,  and  he  has  the  same  rigl.t 
to  hold  them  as  if  so  much  money  had  been  paid  to  him  by  the  defendant. 
His  claim  is  against  the  defendant  for  the  balance,  if  any,  of  the  value  of 
the  land.  These  views  are  fully  supported  by  well -recognized  principles  of 
law.  I  find  no  authority  in  conflict  with  them,  and  the  case  of  Eichards  v. 
Allen,^  is  the  only  authority  which  has  come  to  my  notice  directly  in  point. 
1  2  Burr.  1005.  '  1  Dougl.  137.  »  17  Maine,  296. 


SECT.  II.]  DIX    l\   M.UiCY.  509 

111  that  case  there  was  a  verbal  contract  between  the  plaintiff  and  defendant 
for  the  purchase  and  sale  of  a  farm,  and  the  plaintiff  had  delivered  to  the 
defendant  upon  the  contract  a  quantity  of  brick  and  a  yoke  of  oxen.  After 
the  plaintiff  had  been  in  possession  of  the  farm  for  about  twenty  years  the 
defendant  conveyed  it  to  another  person  and  refused  to  convey  to  the 
plaintiff  lie  then  sued  the  defendant  in  asstunpsit  for  the  value  of  the 
brick  and  oxen,  and  it  was  held  that  he  could  recover,  but  that  he  must 
allow  for  the  use  of  the  land.  The  court  says  :  "  But  the  plaintiffs  claim 
must  be  limited  to  what  is  just  and  equitable  under  all  the  circumstances, 
lie  had  made  ?  mie  payments,  but  he  had  enjoyed  the  farm  for  eighteen  or 
twenty  years.  The  jury  should  have  been  ijcrmitted  to  take  this  into  con- 
sideration even  without  an  account  in  offset,  as  it  was  necessarily  connected 
with  the  plaintilfs  claim,  and  was  of  a  character  to  affect  and  qualify  it." 

j\[y  conclusion,  therefore,  is  that  the  judgment  should  be  reversed  and 
new  trial  granted,  costs  to  abide  event. 

All  concur  except  Johnson,  C,  not  sitting. 

Judgment  reversed. 


E.    STILLMAN  DIX  v.   THOMAS  E.   :MARCY. 
In  the  Supreme  Judicial  Court  of  Massachusetts,  January  30,  1875. 

[Reported  in  116  3fassachusetts  Reports,  4lG.] 

Contract  to  recover  S1800,  the  price  of  certain  real  estate  conveyed  by 
the  plaintiff  to  the  defendant.  The  answer  admitted  the  conveyance,  but 
averred  tiiat  it  was  made  voluntai-ily  and  without  any  agreement  for  pay- 
ment on  the  defendant's  part.  Trial  in  the  Superior  Coiu-t  before  Dicwky, 
J.,  who,  after  verdict  for  the  plaintiff,  reported  the  case  to  this  court.  The 
facts  appear  in  the  opinion. 

S.  T.  Field  for  the  defendant. 

C.  G.  Delano  for  the  plaintiff. 

Endicott,  J.  The  plaintiff  conveyed  his  farm  in  Atigust,  1872,  \c,  the 
defendant,  his  son-in-law,  upon  an  oral  agreement,  tliat  the  dffrndant 
would  furnish  him,  his  wife  and  daughter,  with  a  comf()rtal)Ie  Hiipj.ort  dur- 
ing their  lives.  The  defendant  also  agreed  to  give  the  jjlaintiff  a  jn..rtgngo 
on  the  farm  or  a  life  lease  thereof  to  secure  the  sufiport.  Tudor  this  agree- 
ment the  plai'itiff  with  his  wife  and  daughter  lived  with  the  defendant  on 
the  farm  until  January,  1874.  A  diliiculty  then  occurred.  The  defendant 
ordered  the  plaintiff  to  leave,  and  refused  to  give  liiiii  n  iimrtLrage  ai-cord- 
ing  to  the  agreement.  Since  then  the  defendant  has  furnislied  no  support 
to  the  jdaintiff,  though  his  wife  and  daughter  have  remained  with  tho 
defendant. 


510  DIX   V.   MARCY.  [chap.  IL 

The  defendant  denied  that  he  made  such  an  agreement.  But  the  jury 
found  that  in  consideration  of  the  conveyance  he  agreed  to  give  tlie  plain- 
tiff a  mortgage  or  hfe  lease  to  secure  the  support  of  himself  and  family. 

By  ordering  the  plaintiff  to  leave  the  farm  and  refusing  to  give  the 
mortgage,  the  defetidant  rescinded  his  oral  agreement.  This  agreement, 
being  within  the  prohibition  of  the  statute  of  frauds,  the  plaintiff  could  not 
enforce  it,  but  brings  this  action  to  recovar  the  value  of  the  property  con- 
veyed. It  is  well  settled  that  he  may  do  so.  V/here  n  person  pays  money, 
renders  service,  or  conveys  property  under  an  agreem^Tit,  within  the  statute 
of  frauds,  and  which  the  other  party  refuses  to  i^i-^rm,  an  action  will  lie 
by  such  person  against  the  party  so  refusing,  to  recover  the  money  paid, 
or  the  value  of  the  services  rendered  or  property  conveyed.  Sherburne  v. 
Fuller  ;  ^  Kidder  v.  Hunt ;  ^  Cook  v  I)'>gg"tt ;  ^  Basford  v.  Pearson  ;  *  Wil- 
liams V.  Bemis  ;^  White  v.  Wieland  ;®  f^iHet  v.  Maynard  ;'  King  v.  Brown  ;^ 
Day  V.  New  York  Central  Rai^'-oad  ;^  Richards  v.  Allen. ^'^ 

A  person  who  has  received  a  benefit  under  such  an  agreement,  and  then 
repudiates  it,  is  held  +,o  p'^y  for  that  which  he  has  received ;  and  there  is  an 
implied  assumpsiit  op  which  the  action  against  him  can  be  maintained.  In 
such  an  action  the  plaintiff  is  entitled  to  recover  what  is  due  him,  or  the 
balance  that  is  due  him  arising  out  of  the  transaction  between  the  parties. 
If  the  suit  is  to  recover  the  value  of  land  conveyed,  and  there  has  been 
part  performance  by  the  party  refusing  to  complete  it,  that  is  to  be  con- 
sidered in  determining  what  is  due.  If  payments  have  been  made,  they 
must  be  deducted  from  the  amount  to  be  recovered  for  the  value  of  the 
land.  And  if  the  land  was  not  to  be  paid  for  by  money,  but  by  furnishing 
support  and  maintenance,  and  there  has  been  a  pr.rtial  performance  in  that 
respect,  the  value  of  such  partial  performance  to  the  plaintiff  must  be 
allowed  by  him.  He  is  only  entitled  to  receive  from  the  defendant  the 
value  of  the  property  conveyed  to  him. 

In  this  case  the  value  of  the  support  furnished  to  the  plaintiff  by  the 

defendant  under  the  oral  agreement,  and  before  its  rescission,  was  properly 

deducted  from  the  value  of  the  farm,  and  the  plaintiff  was  entitled  to 

recover  the  value  so  found.    Day  v.  New  York  Central  Railroad ;"  Richards 

V.  Allen  ;  ^^  Moses  v.  Macferlan.^* 

Judgment  on  the  verdict. 

1  5  Mass.  133,  138.  2  i  pick.  328.  3  2  Allen,  439. 

4  9  Allen,  387  ^  108  Mass.  91.  «  109  Mass.  291. 

7  .5  Johns.  85.  8  2  Hill,  485.  ^  51  N.  Y.  583. 

10  17  Me.  296.     Chit.  Con.     (11th  Am.  Ed.)  422,  n.,  and  cases  cited. 

11  51  N.  Y.  583.  ^  17  Me.  296.  is  2  Burr.  1005. 


SECT.  II.]  PARKER   V.   TAINTER. 


511 


HARRIET   B.    PARKER   and   Another  v.   ELIJAH   F.  TAINTER. 
In  the  Supreme  Judicial  Court  of  Massachusetts,  September  8,  1877. 

[Rf ported  hi  123  Massachusetts  Reports,  18o.] 

Contract.  At  the  trial  in  the  Superior  Court,  before  Brioiiam,  C.  J., 
the  plaintiffs  proved  the  following  agreement,  signed  by  the  defendant :  —  ' 
"Xewton,  Mass.,  November  21st,  1873.  Whereas  I  have  agreed  with 
Harriet  B.  and  Sarah  E.  Parker  to  lease  them  a  piece  of  land  between 
Union  Hall  Building  and  Alfred  Howe's  new  building  on  Centre  Street, 
Xewton,  and  whereas  there  have  been  some  objections  to  putting  up  a 
building  on  said  land,  and  in  order  that  the  said  Parker  sisters  may  be 
protected  in  putting  up  the  building,  and  be  saved  from  any  loss  in  the 
matter,  I  do  hereby  agree  to  protect  them  in  the  matter,  or  to  pay  all  costs 
of  the  building  and  take  it  off  their  hands  should  anything  arise  whereby 
I  cannot  give  them  a  lease  for  the  purpose  of  erecting  the  said  building  as 
per  agi-eement." 

It  appeared  in  evidence  that  the  defendant  was  in  possession  of  tlie  land 
mentioned  in  the  agreement  and  of  adjoining  premises,  and  had  been  iu 
such  possession  since  April,  1872,  and  claimed  under  a  lease  thereof  for  a 
terra  often  years  from  that  date;  that  soon  after  the  date  of  the  agree- 
ment, the  plaintiffs  completed  the  erection  of  a  building  on  the  land,  and 
were  in  the  peaceable  and  undisturbed  occupation  of  the  land  and  building 
from  December  1,  1873,  until  some  time  in  May,  1874;  and  that  in  April 
1874,  the  plaintiffs  paid  to  the  defendant  $50  for  the  use  of  the  land  for 
four  months,  from  December  1,  1873,  to  April  1,  1874,  at  the  rent  of 
$12.50  for  each  month. 

It  was  also  in  evideiice  that  a  large  building  adjoim'ng  the  land,  and 
portions  of  whicli  were  held  by  tiie  defendant  under  his  lease,  was,  on  Jan- 
uary 14,  1874,  destroyed  by  fire;  that  the  owners  of  all  the  land,  including 
that  on  which  the  plaintiffs'  building  stood,  and  also  the  land  under  the 
large  building,  contended  that  by  the  destruction  of  this  l)uilding  the  rights 
of  l)oth  the  plaintiffs  and  the  defendant  had  been  determined,  and,  on  Feb- 
ruary 4,  1874,  notified  both  the  jdaintiffs  and  the  defendant  in  writing  to 
remove  therefrom,  and  also  notified  the  i)Iaintiff8  to  remove  tlieir  building 
but  nothing  was  done  as  to  the  plaintiffs  until  some  time  in  May,  1874, 
when  the  owners  took  down  and  removed  the  plaintiffs'  l)nilding. 

The  defendant  never  made  any  written  lease  of  the  land  to  the  plaintiffs, 
and  there  was  no  agreement  in  writing  between  the  parties,  other  than  that 
above  set  forth;  but  the  judge,  against  tlio  oljection  of  the  defendant, 
allowed  the  plaintiffs  to  testify  that  tho  defendant  had,  prior  to  the  makin" 


512  PARKER   V.    TAINTER.  [CHAP.  II. 

of  the  written  agreement,  orally  agreed  to  lease  to  them  the  land  mentioned 
in  the  agreement,  for  the  term  of  eight  years. 

The  defendant  contended  that  the  agreement  was  not  sufficient  to  support 
this  action  ;  that  the  facts  did  not  show  any  breach  thereof;  and  also  relied 
upon  the  statute  of  frauds. 

The  judge  ruled  that  the  statute  of  frauds  was  not  applicable,  and  that, 
as  the  foregoing  facts  were  not  in  dispute,  the  jury  would  be  warranted  in 
returning  a  verdict  for  the  plaintifis  for  the  cost  of  their  building,  with 
interest  from  the  date  of  the  writ.  The  jury  returned  a  verdict  for  the 
plaintiffs  ;  and  the  judge  reported  the  case  for  the  determination  of  this 
court. 

If  the  admission  of  the  oral  evidence  and  the  rulings  of  the  judge  were 
correct,  j Lidgment  was  to  be  entered  on  the  verdict;  if,  in  the  absence  of 
such  oral  agreement,  the  plaintiffs  were  entitled  to  hold  the  verdict,  judg- 
ment was  to  be  entered  thereon;  but,  if  they  were  entitled  to  recover  only 
nominal  damages,  they  were  to  have  judgment  accordingly;  otherwise, 
judgment  was  to  be  entered  for  the  defendant. 

C.  Robinson,  Jr.,  for  the  defendant. 

B.  E.  Perry,  for  the  plaintiffs. 

Gray,  C.  J.  The  plaintiffs  properly  admit  that  the  writing  signed  by 
the  defendant,  reciting  that  he  had  agreed  to  lease  the  land  to  them,  is  not 
a  sufficient  memorandum  of  an  agi'eement  for  a  lease,  to  satisfy  the  statute 
of  frauds,  because  it  does  not  state  the  term  or  duration  of  the  lease,  and 
ttiat  defect  cannot  be  supplied  by  parol  evidence.  Eiley  v.  Farnsworth.^ 
And  we  need  not  consider  whether  the  alternative  agreement  of  the  defend- 
ant to  paj'  to  the  plaintiffs  the  cost  of  the  building,  if  he  should  be  prevented 
from  giving  them  a  lease,  could  be  considered  as  an  independent  promise 
of  itself  sufficient  to  support  an  action. 

The  defendant  had  an  estate,  though  not  an  absolute  title  in  fee,  in  the 
land  If  the  plaintiffs,  in  consideration  of  an  agreement  v^hich  was  within 
the  statute  of  frauds,  and  which  the  defendant  declined  to  carry  out,  ex- 
pended money  in  building  upon  his  land,  they  might  maintain  an  action  to 
recover  the  cost  of  such  building.  Kidder  v.  Hunt;^  White  v.  Wieland;^ 
Cix  V.  Marcy.*  The  evidence  (laying  aside  the  parol  evidence  objected  to) 
would  support  such  an  action,  the  declaration  was  not  objected  to  in  point 
of  form,  the  report  shows  that  it  was  intended  to  present  the  case  for  de- 
cision upon  its  merits,  and  the  verdict  must,  under  the  instructions  given 
to  the  jury,  have  been  for  the  cost  of  the  building.  By  the  terms  of  the 
report  the  plaintiffs  are  therefore  entitled  to 

Judgment  on  the  verdict. 

1  116  Mass.  223.        2  i  pi^k.  328.         »  109  Mass.  291.        *  116  Mass.  416. 


Si:CT.  II.]  DOWLING   V.    McKENNEY.  513 

WILLIAM  P.   DOWLING  v.   CATHARINE  McKENNEY. 
In  the  Supreme  Judicial  Court  of  Massachusetts,  Jcne  28,  1878. 

[Reported  in  124  Mcissitchusetts  Rcfiorts,  -ITS] 

Contract.  The  declaration  contained  tliree  counts.  The  first  was  to 
recover  S^OO,  on  an  account  annexed,  for  "  furnishing  materials  for,  and 
labor  and  work  in  making,  a  monument."  The  second  whs  as  follows  : 
"  And  the  plaintiff  says  that  he  made  an  agreement  with  the  defendant  to 
furnish  materials  and  construct  for  her  a  monument  for  the  sum  of  two 
hundred  dollars;  that  he  furnished  materials  and  made  said  monument  for 
the  defendant,  and  tendered  the  same  to  the  defendant  ;  and  that  she  owes 
him  therefor  the  sum  of  two  hundred  dollars."  The  third  was  on  an 
account  annexed,  and  contained  the  following  items  :  "  To  ten  day^'  labor 
on  monument,  $50.  To  three  days'  services  in  preparing  land  and  founda- 
tion for  same,  $15."     Answer,  a  general  denial. 

At  the  trial  in  the  Superior  Court,  before  Dewet,  J.,  the  plaintiff  testi- 
fied that  he  was  a  manufacturer  of  monuments  and  grave-stones,  keeping 
on  hand  stock  and  partly  finished  monuments,  to  be  finished  to  order ;  that 
the  defendant  came  to  his  shop  and  said  she  would  like  to  get  a  monument; 
that  he  showed  her  several  monuments  partially  manufactured,  among 
them  the  one  in  question,  the  price  of  which  he  told  her  was  8'2.")0,  when 
finished  with  base,  cap,  and  plinth,  and  polished  ;  that  she  said  she  had 
some  laud,  and  he  said  perhaps  they  might  trade  with  the  piece  of  land  ; 
that  if  he  could  get  a  piece  of  land  at  a  reasonable  price  he  might  trade 
with  her;  that  if  she  would  sell  the  land  at  the  same  price  for  which  she 
had  sold  another  piece,  he  would  trade  with  her  for  the  monument  :  that 
they  went  on  the  laud  and  looked  at  the  lots,  for  one  of  which  slie  asked 
S435  ;  that  he  told  her  he  would  throw  off  ^r>0  on  the  monument,  calling 
it  $200  complete,  if  she  would  throw  $35  off  on  the  lot,  and  would  give 
her  8100  in  cash,  and  $100  later,  and  the  monument  completed  with  the 
inscription,  for  the  lot  of  land  ;  and  that  to  this  projjosition  she  agreed, 
and  the  lot  was  selected  and  agreed  on. 

There  was  also  evidence  that  subsequently  the  jtlaintilf  purchased  a 
plinth,  and  one  of  his  workmen  worked  three  or  four  days,  fitting  and 
polishing  the  monument,  putting  on  the  cap  and  mouldings,  ami  one  third 
of  the  inscription,  which  the  defendant  had  given  him  to  be  put  on  the 
moniiment,  at  the  time  of  tho  original  contract,  was  put  on.  taking  three 
days'  work;  that  tho  defendant  then  notified  the  jilaintifT  that  she  wouM 
not  take  the  moniuncnt,  as  she  had  been  advised  it  was  to')  l.irgf,  and 
refused  thereafter  to  take  it ;  that  subsequently  (he  ].laintiir  <-(.mpktLMl  tho 

88 


514  BOWLING  V.  McKENNEY.  [CHAP.  II. 

monument  and  inscription,  and  offered  to  deliver  it  to  her,  and  pay  her 
$100  cash  and  give  her  his  note  for  $100,  secured  by  mortgage  on  the  land, 
and  demanded  a  deed  of  the  land ;  that  she  refused  to  accept  the  monu- 
ment, money,  and  note,  and  refused  to  deliver  him  a  deed  of  the  land. 

Upon  this  evidence,  the  plaintiff  contended  that  he  had  the  right  to 
recover  the  sum  of  ^200  for  furnishing  materials  and  completing  the 
monument,  and  that,  if  he  could  not  recover  for  the  materials  or  the  monu- 
ment, he  had  a  right  to  recover  for  his  labor  in  completing  the  monument. 
The  defendant  contended  that  the  Gen.  Sts.  c.  105,  §  1,  cl.  4,  and  §  5, 
were  a  bar  to  the  action.  The  judge,  by  consent  of  parties,  before  verdict, 
reported  the  case  for  the  determination  of  this  court.  If,  on  this  evidence, 
the  action  could  not  be  maintained,  judgment  was  to  be  entered  for  the 
defendant ;  otherwise,  the  case  to  stand  for  trial. 

J.  C.  Sanborn  for  the  plaintiff. 

W.  L.  Thompson  for  the  defendant. 

Endicott,  J.  It  appears  from  the  report  that  the  defendant  orally 
agreed  to  convey  to  the  plaintiff  a  lot  of  land  valued  at  $400,  and  to  take, 
in  exchange  or  payment  therefor,  a  monument,  estimated  to  be  of  the 
value  of  $200,  when  completed,  and  the  balance  in  money.  After  the 
monument  was  finished,  the  plaintiff  tendered  it  to  the  defendant,  together 
witli  the  balance  in  money,  according  to  the  contract.  The  defendant 
refused  to  accept  the  monument  or  money,  or  to  give  the  deed. 

Whether  this  was  a  sale  or  an  exchange  of  property  is  immaterial. 
Assuming  that  it  was  an  exchange  of  the  land  for  the  monument,  with  a 
balance  in  money  to  be  paid  by  the  plaintiff,  it  is  to  be  governed  by  the 
same  rules  as  apply  to  a  sale  when  the  whole  consideration  is  to  be  paid 
in  money.  Anon. ;  ^  Commonwealth  v.  Clark  ;  ^  Howard  v.  Harris.^  The 
contract  was  therefore  within  the  prohibition  of  the  statute  of  frauds."* 
The  oral  promise  on  the  part  of  the  defendant  was  not  to  pay  money  for 
the  monument,  but  to  convey  a  lot  of  land.  If  the  promise  had  been  to 
pay  in  money  for  the  monument,  when  completed,  it  might  have  come 
within  the  rule,  that  an  agreement  to  construct  or  build  an  article  to  be 
paid  for  when  finished  need  not  be  proved  by  a  memorandum  in  writing, 
as  in  Mixer  v.  Howarth.^  But  that  view  of  the  case  cannot  be  sustained 
on  the  evidence  as  reported  ;  it  does  not  .appear  to  have  been  the  intention 
of  the  parties  to  make  any  contract,  except  that  which  included  the  con- 
veyance of  the  land,  which  was  the  sole  consideration  moving  from  the 
defendant.  That  contract  was  not  in  writing,  and  cannot  be  enforced,  in 
whole  or  in  part.  The  plaintiff  cannot  separate  that  portion  which  relates 
to  the  building  of  the  monument  from  the  whole,  and  recover  upon  it  as  a 
distinct  undertaking.  This  would  be  to  make  a  new  contract  between  the 
parties ;  for  it  was  no  part  of  the  agreement,  as  stated,  to  pay  $200  in 

1  3  Salk.  157.  2  14  Gray,  367,  372.  »  8  Allen,  297. 

*  Gen.  Sts.  c.  105,  §  1,  cl.  4.  «  21  Pick.  205. 


SECT.  Il]  DE    SILVALE    V.    KENDALL.  515 

money  for  the  monument,  but  to  allow  that  sum  as  a  portion  of  the  con- 
sideration for  the  conveyance  of  the  land.  The  plaintiff  therefore  can- 
not recover,  either  upon  his  first  or  second  count,  for  the  value  of  the 
monument. 

But  the  plaintiff  contends  that  he  may,  under  liis  third  count,  recover 
for  his  labor  in  completing  the  monument.  It  is  true,  that  when  a  person 
pays  money,  or  renders  service,  or  makes  a  conveyance,  under  an  agree- 
ment within  the  prohibition  of  the  statute  of  frauds,  and  the  other  party 
refuses  to  perform  it,  an  action  will  lie  to  recover  the  money  so  paid,  or  the 
value  of  the  services  rendered  or  the  property  conveyed  ;  but  it  is  on  the 
ground  that  a  party  who  has  received  a  benefit,  under  an  agreement  which 
he  has  repudiated,  shall  be  held  to  pay,  upon  an  implied  assumpsit,  for 
that  which  he  has  received.  Dix  v.  Marcy,*  and  cases  cited.  In  the 
case  at  bar,  the  defendant  received  no  benefit  from  the  labor  perfunned  in 
completing  the  monument,  although  the  plaintiti'  may  have  suffered  a  loss 
because  he  is  unable  to  enforce  his  contract,  and  no  recovery  can  l^  had 
for  the  labor  on  the  monument,  as  charged  in  the  account  annexed  to  the 
third   count. 

But  this  rule  does  not  apply  to  the  item  for  services  performed  by  the 

plaintiff  in  preparing  the  land  and  foundation.     If  this  refers  to  the  lot  of 

the  defendant  where  the  monument  was  to  stand,  and  the  work  was  done 

upon  it,  we  cannot  say  as  matter  of  law  that  it  was  not  of  benefit  to  the 

defendant.     That  is  a  question  of  fact  to  be  determined,  and  by  the  terms 

of  the  report  the  entry  must  be 

Case  to  stand  /or  trial. 


(b.)     Performance  ivijyossihle. 

DE  SILVALE  v.   KENDALL. 
In  the  King's  Ben-cif,  April,  18,   1815. 

[Reported  in  4  Mntilc  jj-  Seliryn,  37.] 

Assumpsit  for  money  had  and  received,  and  the  monoy  counts.  Plea, 
non  assimpsit.  At  the  trial  before  Bavley,  J.,  at  the  last  Lancashire  sum- 
mer assizes,  there  w:is  a  verdict  for  the  plaintiff  for  192/.  9«.  10(/.,  subject 
to  the  opinion  of  the  court  upon  the  following  case. 

By  charter-party  of  atrreightmcnt,  2d  of  November,  1812,  between  the 
defendant  as  master  of  the  ship  Shannon,  then  lying  in  the  port  of  Liver- 
pool, of  the  one  part ;  and  the  jilaintiff,  as  merchant,  of  tlio  other  part  ; 
the  defendant  let,  and  the  [•laintiff  took  the  said  ship  to  frei-ht,  on  a  voy- 
age from  Liverpool  to  Maranham,  in  Soiitli  America,  and  from  thence  Itack 

1  IIG  Masb.  410. 


516  DE    SILVALE   V.    KENDALL.  [CHAP.  IL 

to  liiverpool,  upon  certain  terms  and  conditions,  and  upon  covenants  on 
the  part  of  the  defendant  for  receiving  and  delivering  an  outward  and 
homeward  cargo,  and  for  the  performance  of  the  voyage  ;  and  there  was, 
amongst  others,  a  covenant  that  the  ship  should,  at  the  commencement 
and  during  the  continuance  of  the  voyage,  at  the  expense  of  her  owners,  be 
kept  tight,  staunch,  and  strong,  and  well  and  sufficiently  fitted  out,  vic- 
tualled, and  manned  ;  in  consideration  whereof  the  plaiutift'  covenanted  with 
the  defendant  to  dispatch  the  vessel,  to  load  on  board  of  her  at  Maranham 
a  cargo  of  cotton,  and  to  discharge  the  same  in  Liverpool,  and  also  that  he 
should  and  would  *'  pay  or  cause  to  be  paid  mito  the  defendant  for  the 
freight  and  hire  of  the  vessel  on  the  said  voyage  from  Liverpool  to  Maran- 
ham 120/.  British  sterling;  and  from  Maranham  to  Liverpool  at  and  after 
the  rate  of  2|c?.  British  sterling  per  pound  weight  for  each  and  eveiy 
pound  of  cotton  which  should  be  delivered  at  the  King's  Beam  in  Liver- 
pool ;  such  freight  to  be  paid  as  follows,  viz.,  1 20/.  British  sterling  for 
freif^ht  of  the  outward  cargo  to  Maranham,  and  as  much  cash  as  may  be 
found  necessary  for  the  vessel's  disbursements  in  Maranham,  to  be  ad- 
vanced by  the  plaintiff,  his  agents  or  assigns,  to  the  defendant,  when  re- 
quired, free  from  interest  and  commission,  at  the  current  exchange  of  the 
place,  and  the  residue  of  such  freight  to  be  paid  on  the  delivery  of  the  car- 
go in  Liverpool,  in  good  and  approved  bills  on  London  not  exceeding  three 
months'  date."  The  vessel  sailed  from  Liverpool,  and  arrived  at  Maranham 
with  her  outward  cargo,  and  delivered  it  there  ;  when  120/.,  the  sum 
stipulated  by  the  charter-party  to  be  paid  for  the  freight  of  the  outward 
cargo,  were  paid  to  the  defendant  by  the  agents  of  the  plaintiff.  The 
plaintiff's  agents  also,  on  his  behalf,  paid  or  advanced  to  the  defendant  at 
Maranham,  192/.  9s.  lOrf,  for  the  necessary  disbursements  of  the  vessel  at 
Maranham,  as  stipulated  by  the  charter-party  to  be  there  paid  or  advanced. 
The  vessel  received  at  Maranham  from  the  agents  of  the  plaintiff  a  home- 
ward cargo,  and  sailed  with  it  for  Liverpool ;  but  during  the  voyage  was 
captured,  and,  together  with  her  cargo,  was  wholly  lost  to  the  proprietors, 
and  never  arrived  at  Liverpool. 

The  question  is,  whether  the  plaintiff  is  entitled  to  recover  the  192/.  9s. 
10c/.  so  paid  or  ac^vanced  to  the  defendant  at  Maranham.     If  he  is,  the  ver- 
dict to  stand  :  if  not,  a  nonsuit  to  be  entered. 
Richardson  for  the  plaintiff. 
Littledale  for  the  defendant. 

Lord  Ellenborough,  C.  J.  By  the  policy  of  the  law  of  England  freight 
and  wages,  strictly  so  called,  do  not  become  due  until  the  voyage  has  been 
performed.  But  it  is  competent  to  the  parties  to  a  charter-party  to  cove- 
nant by  express  stipulations  in  such  manner  as  to  control  the  general  opera- 
tion of  law.  The  question  in  this  case  is  whether  the  parties  have  not  so 
covenanted  by  the  stipulations  of  this  charter-party.  If  the  charter-party 
be  silent  the  law  will  demand  a  pei-formance  of  the  voyage,  for  no  freight 


SECT.  II.]  DE   SILVALE   V.    KENDALL.  517 

can  be  due  until  the  vo3-age  be  completed.  But  if  the  parties  have  choseu 
to  stipulate  by  express  words,  or  by  words  not  express  but  sufficiently  in- 
telligible to  that  eud,  that  a  part  of  the  freight  (using  the  word  freight) 
should  be  paid  by  anticipation,  which  should  not  depend  upon  the  perform- 
ance of  the  voyage,  may  they  not  so  stipulate  ?  Now  by  tliis  charter-party  it 
is  stipulated  that  120/.  shall  be  paid  to  the  defendant  for  freight  of  the  out- 
ward cargo  to  ^laranham,  and  as  much  cash  as  may  be  found  necessary 
for  the  ship's  disbursements  in  Maranham,  to  be  advanced  by  the  j)laintitt', 
his  agents  or  assigns,  when  required,  free  from  interest  and  commission,  at 
the  current  exchange  of  the  place,  and  the  residue  of  such  freight  (implied- 
ly therefore  denominating  the  former  payment  as  an  advance  of  freight, 
without  interest  or  commission)  upon  the  delivery  of  the  cargo  at  Liver- 
pool. It  is  argued  on  one  side  as  if  this  was  a  mere  loan  to  provide  for  the 
necessary  disbursements  of  the  ship  at  Maranham,  the  money  to  be  ad- 
vanced indeed  at  Maranham,  and  to  be  afterwards  repaid  by  deducting  it 
from  the  freight,  if  freight  should  be  earned,  but  to  be  repaid  at  all  events 
whether  freight  should  be  earned  or  not.  And  I  certainly  agree  that  if  the 
charter-party  does  not  import  that  this  was  to  bo  a  payment  in  advance, 
specifically,  of  freight,  the  result  would  be  as  contended  for.  But  in  tho 
first  place  the  advance  is  to  be  made  free  of  interest  and  commission,  which 
shows  it  not  to  have  been  intended  as  a  loan  ;  for  if  a  loan,  why  should  not 
interest  and  commission  be  paid  for  it]  In  the  next  place  the  word  residue 
imports  that  it  is  freight  that  was  to  be  partially  advanced,  of  which  tho 
remainder  only  was  to  abide  the  usual  risk  which  the  law  casts  upon  tho 
earning  of  freight,  that  is,  the  conveyance  of  the  cargo  to  its  place  of  des- 
tination. The  preceding  payment  was  on  the  contrary,  by  the  stipulation 
of  the  parties  not  to  be  subject  to  that  risk,  which  but  for  the  stipulation 
and  by  the  ordinary  course  of  law  it  would  have  been.  And  there  can  bo 
no  doubt  that  tlie  payment  of  freight  may  by  the  agreement  of  the  parties 
be  so  exempted.  1  therefore  read  this  covenant  as  if  it  were,  that  120/. 
should  be  paid  to  the  defendant  for  outward  freight  at  Maranham,  and 
that  as  much  more  as  might  be  necessary  for  the  shi|)'s  disbursements 
should  be  advanced  by  way  of  freight,  and  that  tlie  resithie  should  remain 
subject  to  the  contingency  of  the  ship's  arrival  and  delivery  of  tho  goods  at 
their  place  of  destination.  A  part  was  to  be  free  from  all  contingency,  tho 
residue  was  to  abide  tiie  contingency.  Thus  it  ajipears  to  mo,  upon  tho 
plain  meaning  of  the  instrumcjit  now  before  us,  and  witiiout  looking  to 
other  ca.se8  which  apply  to  diflcrent  forms  of  covenanting  from  the  present, 
that  this  money  was  received  at  Maranham  as  freight,  and  tliat  it  is  dis- 
tinguished by  the  provision  re8i)ecting  the  residue  from  that  part  of  tho 
freight  which  was  to  abide  tho  ordinary  contingency  impo.^ed  by  the  law. 
I  therefore  think  that  inasmuch  as  it  is  freight,  tho  plaint ilf  is  not  entitled 
to  recover  in  this  action. 

Le  Bla.nc,  J.     I  agree  to  the  construction  which   has  lioon  put  by  my 


518  DE   SILVALE   V.    KENDALL.  [CHAP.  II. 

Lord  upon  this  charter-party.     The  plaiutifF  has  advanced  a  sum  of  money 
to  the  defendant  at  Maranham,  which  he  now  seeks  to  recover,  upon  the 
ground  that  it  was  advanced  by  way  of  loan,  or  as  a  payment  by  anticipa- 
tion of  freight  which  was  not  then  nor  has  ever  since  been  earned.     It  is 
open  to  the  parties  to  such  contracts  as  the  present  to  make  such  stipula- 
tions, consistently  with  law,  as  they  shall  please.     And  here   the  parties 
have  contracted  for  the  letting  and  taking  the  ship  to  freight  on  a  voyage 
to  Maranham  and  back  to  Liverpool,  and  for  the  payment  of  a  specific  sum 
for  the  outward  freight  to  Maranham,  and  for  the   homeward  freight  they 
contract  to  pay  according  to  a  specific  rate  of  payment  upon  the  goods  to 
be  delivered.     But  they  also  contract  in  what  manner  this  freight  shall  be 
paid,  that  is,  that  the  outward  freight,  together  with  so  much  of  the  freight 
home  as  should   be  necessary  for  the  disbursements  of  the  ship  at  Maran- 
liam,  should  be  paid  in  advance  when  required,  and   the  residue  of  such 
freight  to  be  paid  upon  delivery  of  the  homeward  cargo  at  the  place  of 
destination.     Now  there  can  be  no  doubt  that  it  is  competent  to  parties  to 
stipulate  for  part-payment  of  the  freight  before  it  can  be  known  whether 
any  freight  will  accrue  or  not.     And  have  they  not  so  stipulated  by  this 
charter-party  1     If  it  was  intended  that  what  was  advanced  at  Maranham 
should  be  returned  in  the  event  that  has  happened,  the  parties  might  have 
provided  for  it  by  their  contract.     That  this  question   has  not  yet  come 
before  the  courts  can  only  be  accounted  for  by  supposing  that  persons  have 
not  been  advised  to  attempt  the  question,  because  undoubtedly  there  must 
have  been  many  cases  before  this,  in  which  the  parties  have  stipulated  for  a 
payment  of  freight  in  advance  ;  indeed  such  cases  are  very  common,  and  it 
must  very  often  have  happened  that  the  ship  has  not  arrived.     And  what 
has  happened    still  more  often,  is  that  wages  have  been  stipulated  for  and 
paid  in  advance  at  a  particular  period  of  the  voyage,  which  is  similar  to 
the  present  case,  and  yet  I  believe  no  action  has  ever  been  brought  to  re- 
cover back  such  wages  from  those  capable  of  paying,  on  the  ground  that  no 
freight  was  earned,  and  therefore  wages  were  never  due.     It  is  impossible 
to  consider  this  as  a  loan  of  money,  because  of  the  exception  by  which  it  is 
made  free  from  interest  and  commission,  and  because  also  "  the  residue  of 
such  freight"   is  made  payable   upon  the  ship's  arrival.     This  covenant, 
therefore,  must  be  understood  as  a  covenant  for  the  payment  of  the  freight 
in  different  modes,  some  part  of  it  upon  the  arrival  of  the  ship  at  Maran- 
ham, and  the  rest  to  abide  the  contingency  of  the  ship's  return  to  her  port 
of  destination.     It  is  clear  therefore  the  plaintiff  is  not  entitled  to  recover. 
Bayley,  J.     Wherever  there  is  an  express  stipulation  that  the  party  who 
is  to  be  entitled  to  freight  shall  be  paid  any  portion  of  it  in  advance,  there 
ought  also  to  be  an  express  stipulation  that  the  party  paying  it  shall  be 
entitled  to  recover  it  back,  if  freight  be  not  earned,  if  such  be  the  intention 
of  the  parties  to  the  instrument.     For  without  some  provision  of  that  sort 
how  are  we  to  raise  a  new  implied  contract  to  that  effect?     It  seems  clear 


SECT.  II.]  DE   SILYALE   V.    KENDALL.  519 

that  the  parties  to  this  iustrument  have  stipulated  for  a  partial  payment 
in  advance  by  way  of  freight  and  not  as  a  loan  ;  for  after  settling  the 
amount  and  rate  of  freight  to  be  paid  for  the  voyage  out  and  home,  they 
stipulate  that  such  freight  shall  be  paid  as  follows,  that  is,  the  outward 
freight  to  Maranham,  and  as  much  cash  as  should  be  necessary  for  the 
ship's  disbursements  in  Maranham  to  be  advanced  by  the  freighter  when 
required,  free  from  interest  and  commission,  at  the  current  exchange  of  the 
place,  and  the  residue  of  such  freight  on  the  delivery  of  the  homeward 
cargo.  Therefore,  taking  the  whole  of  the  clause  together,  it  seems  to  me 
that  this  payment  is  to  be  considered  as  a  payment  of  so  much  of  the 
freight  in  advance.  And  if  that  be  so,  upon  what  ground  is  it  to  be  re- 
covered back  ]  It  is  suggested  as  a  ground,  that  the  freight  has  failed  by 
the  non-performance  of  the  voyage,  and  thus  the  plaintirt'  has  derived  no 
benefit  from  it ;  but  what  benefit  has  the  defendant  derived  1  lie  also  has 
lost  as  well  as  the  plaintiff,  and  the  question  is,  whether  he  is  to  bear  a 
farther  loss.  Now  in  order  to  maintain  money  had  and  received,  it  is  in  gen- 
eral incumbent  upon  the  plaintiff  to  show  that  the  defendant  has  money  of 
the  plaintiff  which  in  equity  and  good  conscience  he  ought  not  to  detain 
from  him.  But  here  the  question  raised  is  not  whether  the  defendant  has 
money  which  he  ought  not  to  detain,  but  whether  out  of  his  own  money  he 
shall  be  bound  to  make  good  that  which  the  plaintiff  has  lost.  It  seems 
to  me  that  the  defendant  shall  not  be  so  bound. 

Dampier,  J.  It  has  been  argued  upon  the  words  of  this  charter-party,  that 
"  as  much  cash  as  may  be  found  necessary  for  the  vessel's  disbursements  in 
Maranham,  to  be  advanced  by  the  plaintiff  to  the  defendant,"  imports  a 
loan  of  money,  and  not  a  payment  of  freight.  And  if  those  words  stood 
alone,  and  unexplained  by  the  other  part  of  the  clause,  I  should  have 
thought  they  might  have  been  subject  to  such  a  construction.  But  taking 
the  whole  clause  together  I  think  it  is  not  so.  It  stipulates  for  the  pay- 
ment of  such  freight,  that  is,  the  outward  and  homeward  freight ;  the 
outward  freight  and  so  much  cash  as  should  bo  necessary  for  the  ship's  dis- 
bursements in  ilaranliam,  to  bo  advanced  at  the  cm-rent  exchange  of  the 
place  ;  and  then  it  adds  that  the  residue  of  sucli  freight  sliall  bo  paiil  on 
the  delivery  of  the  cargo.  So  that  it  contemplates  the  wholo  aa  freight ; 
and  beside,  the  exemption  from  interest  and  commission  tends  to  show  that 
it  was  not  a  loan.*     I  think  it  impossible  therefore  upon  tho  whole  of  this 

1  If  in  the  present  case,  wliicli  is  to  be  decided  aceordin;^  to  Ki)j;lish  law,  llie  iidviince 
could  be  treated  as  a  loan,  it  iiiif^lit  b<!  neceasary  to  consider  that  case  with  the  utnio.st 
attention,  .  .  .  but  it  would,  an  it  Keems  to  me,  bo  ini|)os.sible  to  liohl  that  it  was, 
without' overruling  all  the  ea.ses  on  this  subject,  or  the  doetrin<>  iLssunied  in  all  that  have 
been  decided  since  the  time  of  Charles  II.  .  .  .  Although  I  have  said  that  thin 
course  of  busii.css  may  in  theory  bo  anomalous,  I  think  its  origin  and  exisfon.o  are 
capable  of  a  rea.sonable  explanation.  It  aroscr  in  the  case  of  the  h.ng  Indian  voyag.-H. 
The  length  of  voyage  would  keep  the  shipper  for  too  h.ng  a  time  out  of  mon<-y  ;  anil 
frei-'ht  is  much  more  didicult  to  pledge  aa  a  security  to  third   p.-rsons  than  goods  reprc- 


520  WEIGHT   V.    NEWTON.  [CHAP.  II. 

clause  to  consider  this  payment  as  a  loan.     Then  the  question  is,  whether 

freight  eo  nomine  may  not  be  stipulated  to  be  paid  in  advance;  and  upon 

that  I  think  there  can  be  no  doubt  that  it  may.     As  little  doubt  exists  in 

my  mind  that  this  is  a  stipulation  of  that  nature  to  pay  a  portion  of  the 

freight  in  advance,  and  it  does  not  appear  that  there  is  any  covenant  that 

the  party  shall  I'ecover  it  back  in  the  event  of  freight  not  being  earned. 

Therefore  it  does  not  seem  to  me  that  the  defendant  has  received  money 

which  he  keeps  against  good  conscience.     And  if  so  the  plaintiff  is  not 

entitled  to  recover. 

Judgment  of  nonsuit. 


WRIGHT   V.   NEWTON. 
In  the  Exchequer,  Easter  Term,  1835. 
[Reported  in  2  Crompton,  Meeson,  and  Roscoe,  124.] 

Assumpsit  for  money  had  and  received.     Plea,  no7i  assumpsit. 

At  the  trial  before  Alderson,  B.,  at  the  last  Lancaster  assizes,  it 
appeared  that  the  defendant,  being  in  the  occupation  of  a  public-house,  and 
being  desirous  of  leaving  it,  entered  into  a  verbal  agreement  with  the 
plaintiff  for  the  sale  to  him,  on  behalf  of  a  Mrs.  Williams,  of  the  good-will 
and  fixtures  of  the  house,  at  the  sum  of  120/.,  50/.  of  which  was  to  be  paid 
on  the  Monday  after,  if  the  landlord  consented  to  the  change  of  tenancy, 
and  on  payment  of  the  remainder  of  the  money  the  defendant  was  to  give  up 
possession.  The  50/.  was  paid  to  the  defendant  on  the  19th  of  May,  and 
on  the  20th,  on  application  being  made  to  the  landlord,  he  verbally  agreed 
to  accept  Mrs.  Williams  as  tenant.  In  consequence  of  this,  Mrs.  Williams, 
for  whom  the  house  had  been  taken  by  the  plaintiff,  removed,  and  took  her 
furniture  to  the  defendant's  house,  and  went  to  reside  there,  and  continued 
there  for  five  or  six  weeks,  and  carried  on  the  business,  but  the  defendant 
and  his  wife  also  continued  to  reside  there.  It  appeared,  that,  on  the  2d  of 
June,  the  landlord  withdrew  his  consent  to  accept  Mrs.  Williams  as  tenant. 
The  defendant  on  being  informed  of  this,  said  that  Mrs.  Williams  might 
keep  his,  the  defendant's,  name  up,  and  he  would  give  possession  in  spite  of 
the  landlord.  Mrs.  Williams  subsequently,  by  the  defendant's  consent, 
took  away  her  furniture,  but  tlie  defendant  refused  to  return  the  50/. 
The  defendant  afterwards  sold  the  good-will  and  fixtures  to  another  person, 
who  was  accordingly  let  into  possession.  This  action  was  brought  to 
recover  back  the  sum  of  50/.,  as  money  had  and  received  for  the  use  of 
the  plaintiff.     The  learned  Baron  left  it  to  the  jury  to  say  w^hether  the 

sented  by  a  bill  of  lading.  Therefore  the  shipper  agreed  to  make  the  advance  on  what 
he  would  ultimatelj'  have  to  pay,  and  for  a  consideration,  took  the  risk  in  order  to 
obviate  a  repayment,  which  disarranges  business  transactions.  —  Mr.  Justice  Bkett,  iu 
Allison  V.  Bristol  Marine  lus.  Co.,  L.  E.  1  Ap.  Cas.  209,  225.  —  Ed. 


SECT.  II.]  HIRST  V.   TOLSON.  521 

parties  had  agreed  to  resciud  the  contract,  and  if  they  were  of  tliat  opinion, 
he  directed  them  to  lind  a  verdict  for  the  plaintifl";  which  they  uccordiuj^ly 
diJ. 

Cresswell  now  moved  by  leave  of  the  learned  Baron  to  enter  a  nonsuit. 

Parke,  B.  —  It  seems  to  me  that  this  was  a  contract  with  a  condition 
that  the  landlord's  consent  should  he  obtained  ;  and  the  question  is,  luis 
tluit  condition  been  performed  ?  There  was  a  deposit  of  50/.  made  upon 
the  landlord's  agreeing  to  take  Mrs.  AVilliams  as  tenant,  but  the  remainder 
of  the  nione}'  not  having  been  paid,  and  Mrs.  Williams  not  having  entered 
into  possession  as  tenant,  the  landlord  subsequently  withdrew  his  consent. 
I  think  it  must  be  taken  as  if  the  landlord  never  has  consented  ;  and  if  so, 
the  condition  has  not  been  performed.  There  would  be  nothing  to  bind 
the  landlord  unless  there  had  been  an  actual  transfer  of  the  possession. 
The  money  was  paid  on  a  consideration  which  has  failed,  and  therefore  the 
plaintifl'  is  entitled  to  recover  it  back,  as  money  had  and  received  to  his 
use.  The  simple  question  is,  whether  the  landlord's  consent  of  the  19th 
of  May  was  binding  upon  him  ?  I  think  it  was  not,  and  therefore  the  con- 
dition was  not  performed.     There  must  be  no  rule. 

EoLLAND,  B.  —  The  consent  would  have  been  sufficient  if  Mrs.  Williams 
liad  acted  upon  it  before  it  was  withdrawn,  by  paying  the  remainder  of  the 
purchase-money,  and  getting  into  possession  as  tenant.  As  it  was  with- 
drawn before  Mrs.  Williams  took  possession  as  tenant,  I  think  that  the 
verdict  was  right. 

Aldersox,  B.  —  I  think  that  the  defendant  never  gave  up  possession  to 
Mrs.  Williams  as  tenant.  lie  kept  possession  of  the  house  for  a  very  good 
reason ;  because  the  remainder  of  the  purchase-money  was  not  paid. 

Rule  re/used. 


HIRST  V.   TOLSON". 

In  Cuancery,  before  Sir  Lancelot  Siiauwell,  V.  C,  Aimui.  25,  18 JO. 

[Ri'jiorlid  in  10  Simons,  620.] 

In  November,  1845,  Sarah  Hirst,  widow,  articled  her  son,  Henry,  to 
Richard  Tolson,  a  solicitor  and  attorney,  for  five  years,  and  paid  Tolson  a 
jiremium  of  200/.  V>y  the  Articles,  Mrs.  Hirst,  for  liorself,  her  executors 
and  administrators,  covenanted  to  provide  her  son  with  l)oard,  lodging,  and 
clothes;  and  Tolson,  for  liiinsclf,  his  executors  and  administrators,  cov- 
enanted with  Mrs.  Hirst  to  instruct  her  son  or  cause  him  to  bo  instructed 
in  the  business  or  profession  of  an  attorney  and  solicitor  which  ho  then  did 
or  should,  at  any  tiiiio  thercafccr  during  the  term,  use  or  practise;  and,  at 
the  end  of  the  term,  to  use  his  best  endeavors  to  procure  him  to  be  admitted 
au  attorney  and  solicitor. 


522  HIEST   V.   TOLSON.  [CHAP.  II 

In  October,  1847,  Tolson  died  :  the  defendants  were  his  executors.  After 
his  decease,  Mrs.  Hirst  applied,  to  a  judge  at  Chambers,  to  order  the  de- 
fendants to  return  a  portion  of  the  premium :  but  the  learned  judge  dis- 
missed the  application,  on  the  ground  that  he  had  no  jurisdiction  to  make 
the  order  against  the  executors  of  an  attorney.  Mrs.  Hirst  and  her  son 
then  filed  the  bill  in  this  cause,  praying  that  the  defendants  might  be 
decreed  to  return  to  her  a  just  proportion  of  the  premium,  out  of  Tolson's 

assets. 

The  defendants  stated,  in  their  answer,  that,  after  Tolson's  death,  they 
arranged  with  a  gentleman  named  Clongh,  whom  Tolson  had  taken  into 
partnership  with  him  shortly  before  his  death,  to  take  Henry  Hirst  as  his 
clerk,  for  the  remainder  of  the  five  years,  without  any  premium  ;  that  Henry 
Hirst  continued  in  the  office  for  about  ten  days  after  Tolson's  death,  and 
then  left  it  without  assigning  any  reason  for  so  doing;  and  that  the  de- 
fendants had  since  offered,  but  without  admitting  their  legal  liability,  to 
refer  the  matter  to  the  arbitration  of  any  respectable  solicitor ;  but  that 
Mrs.  Hirst  had  rejected  their  ofier. 

Mr.  Bethell  and  Mr.  Rogers  for  the  plaintiffs. 
Mr.  Roundell  Palmer  and  Mr.  Amphlett  for  the  defendants. 
The  Vice-Chancellor.  In  this  case,  it  is  alleged  that  a  debt  has  a(;crued 
to  the  plaintiffs,  and  they  are  seeking  to  obtain  payment  of  it  out  of  assets. 
The  case,  therefore,  is  plainly  distinguishable  from  the  case  of  May  v.  Skey,^ 
which  I  decided  a  few  days  ago.  In  that  case,  a  lady  had  advanced  money 
to  a  married  woman  (whose  husband  had  gone  abroad  and  left  her  wholly 
unprovided  for)  to  enable  her  to  procure  clothes  and  other  necessaries  ;  and 
the  lady  sued  the  husband  for  the  money.  In  the  course  of  the  argument 
two  cases  were  cited  in  which  the  court  had  ordered  money  advanced  under 
similar  circumstances,  to  be  repaid.  But,  in  each  of  those  cases,  the  hus- 
band was  dead,  and  the  suit  was  against  his  assets.  In  May  v.  Skey,  how- 
ever, the  husband  was  alive,  and,  therefore,  I  held  that  the  bill  would  not 
lie ;  for  the  court  has  no  jurisdiction  to  order  a  debt  to  be  paid  by  the 
debtor  himself. 

In  this  case  it  appears,  on  the  face  of  the  articles,  that  there  is  a  debt : 
what  the  amount  of  it  is,  I  do  not  say :  that  must  be  determined  by  the 
Master  :  but,  there  being  a  debt  and  payment  of  it  being  sought  out  of  the 
assets  of  a  person  who  is  dead,  I  am  clearly  of  opinion  that  it  is  a  case  in 
which  this  court  has  jurisdiction.  Therefore  I  shall  refer  it  to  the  Master, 
to  ascertain  what  part  of  the  premium  ought  to  be  returned ;  and,  as  the 
defendants  admit  assets,  I  shall  order  them  to  pay  to  the  plaintiffs  what 
the  Master  shall  ascertain ;  and  to  pay  the  costs  of  the  suit  also. 


.2 


1  16  Sim.   588.  ^  Affirmed  on  appeal,  2  Mac.  &  G.  134. —  Ed. 


SECT.  II.]  KNOWLES   r.    LOVILL.  523 


KNOWLES   V.   BOVILL   and   Another. 
In  the  Exchequer,  February  10,  1870.  • 

[Rejw-ted  in  22  Law  Times  Reports,  70.) 

The  plaiutiff  was  a  mill-owiKT  and  miller  carrying  on  bnsincss  at  Nun- 
eaton, in  the  county  of  Warwick.  The  defendants  were  the  executors  of 
the  late  Geo.  Ilinton  Bovill,  an  engineer  and  patentee  of  certain  improve- 
ments in  the  manufacture  of  wheat  and  other  grains  into  meal  and  tionr. 
Letters-patent  bearing  date  the  5th  June,  1849,  were  granted  to  the  siiid 
Geo.  Hinton  Bovill  for  the  said  invention,  for  the  term  of  fourteen  years 
from  that  date. 

Afterwards  further  letters-patent  bearing  date  the  Gth  June,  1863,  were 
granted  to  the  said  Geo.  Hinton  Bovill  for  the  extension  of  the  patent  for 
the  said  invention,  for  the  term  of  five  years  from  and  after  the  expiration 
of  the  said  original  letters-patent.  In  the  month  of  March,  1804,  the  plain- 
tiff purchased  from  one  Thomas  liollick  the  mill  wherein  he  has  since 
carried  on  his  said  business,  together  with  the  good-will  and  the  stock  and 
effects  thereof. 

Shortly  after  the  plaintiff  had  purchased  the  said  mill,  actions  were  com- 
menced by  the  said  Geo.  H,  Bovill  against  the  said  Thomas  Hollick  ami 
the  plaintiff  respectively  for  infringement  of  the  said  patent  by  the  user,  in 
the  said  mill,  of  certain  machinery  alleged  to  be  an  infringement  of  the 
said  patent. 

The  said  actions  were  settled  by  payment  to  the  said  G.  H.  Bovill  of 
500/.,  and  by  an  agreement  for  the  purchase  of  the  right  or  license  to  use 
the  said  letters-patent  at  the  said  mill  for  the  residue  of  the  term  of  the 
said  letters-patent,  for  the  sum  of  560/.,  and  on  the  6th  March  a  deed  was 
executed  for  the  purpose  of  carrying  out  the  arrangement  for  a  settlement 
of  the  said  action.  On  the  same  day  the  said  560/.  was  piid  to  tlie  said 
G.  H.   Bovill  and  a  receipt  given. 

The  plaintiff,  having  heard  that  G.  H.  Bovill  was  about  to  take  measures 
for  the  purpose  of  having  the  said  invention  i)roteeted  fur  a  fin-tiier  period, 
instructed  his  solicitors,  Messrs.  Hall  and  Janion,  to  cnnuuiiicate  with  .Mr. 
Bovill  on  the  subject,  and  they  accordingly,  on  the  15th  Ai.ril,  IMS,  wrote 
the  following  letter  to  the  said  G.  H.  I'.ovill :  — 

cjifi^ You  may  perhaps  remember  tliut  we  had  a  corresj)ondenco  with 

you  some  time  ago,  we  acting  on  belialf  of  Mr.  Knowles,  relative  to  an 
infringement  by  the  late  Mr.  Hollick  of  your  patent  at  his  mills  at  Nun- 
eaton. You  will  also  probably  recollect  that  Mr.  Hollick  paid  your  rluiin, 
and  the  matter  was  amicably  adjusted.     B«.th  Mr.  Hollick  and  .Mr.  KnowIcB 


524  KNOWLES   V.    BOVILL.  [CHAP.  II. 

declined  to  join  in  the  Millers'  Association.  We  are  now  informed  that  it 
is  your  intention  to  apply  for  an  extension  of  your  patent,  and  though  we 
are  given  to  understand  that  your  application  will  be  opposed,  Mr.  Knowles 
wishes  us  to  say  on  his  behalf  that  he  has  no  wish  to  be  a  party  to  such 
opposition,  provided  he  can  make  a  satisfactory  arrangement  with  you  in 
the  event  of  your  patent  being  renewed,  and  we  should  therefore  be  glad  to 
hear  from  you  on  the  subject. 

A  correspondence  ensued,  and  finally  the  following  letter  was  written  by 
plaintifTs  attorney  to  the  said  G.  H.  Bovill  :  — 

Dear  Sir,  —  The  prevailing  opinion  of  millers  in  this  part  of  the  coun- 
try is,  tliat  you  will  not  succeed  in  obtaining  a  renewal  of  your  patent,  and 
having  regard  to  the  uncertainty  on  this  point,  j\Ir.  Knowles  is  not  disposed 
to  give  so  much  as  250/.  down,  but  he  will  give  150/.  for  the  free  use  of 
your  patent  for  ever,  and  of  the  improvement  you  contemplate  making  in 
it  as  mentioned  in  your  previous  correspondence. 

To  this  letter  Mr.  Bovill  wrote  the  following  answer  :  — 

"In  reply  to  your  favor  of  yesterday,  as  I  do  not  wish  to  have  any 
opposition  to  my  prolongation,  I  will  accept  Mr.  Knowles's  offer  of  150/. 
for  the  free  use  for  ever  of  the  1849  patent  for  whatever  time  it  may  be 
further  prolonged  or  not  prolonged,  as  well  as  the  free  use  for  three  years, 
as  mentioned  in  my  letter  (say  until  the  1st  M'ay,  1871),  of  the  new  patent 
for  milling,  which  I  am  about  to  take  out  as  soon  as  I  am  well  enough  to 
return  to  business." 

The  plaintiff  paid  the  sum  of  150/.  in  accordance  with  the  arrangement 
contained  in  the  above  correspondence,  and  Mr.  Bovill  signed  the  following 
receipt :  — 

"Eeceived  from  Mr.  John  Knowles  the  sum  of  150/.  for  the  free  use  for 
ever  of  ray  existing  patents  relating  to  and  as  applied  to  corn  mills,  and 
also  for  the  free  use  for  the  period  of  three  years  from  the  grant  thereof  of 
a  new  patent  for  milling,  which  I  am  about  to  take  out." 

The  said  G.  H.  Bovill  died  on  the  9th  May,  1868,  a  few  days  after  the 
receipt  of  the  150/.,  and  in  consequence  of  his  illness  and  subsequent  death, 
neither  he  nor  the  defendants,  his  executors,  ever  took  or  have  taken  any 
measures  for  obtaining  a  prolongation  of  the  said  letters-patent  for  a 
further  period,  nor  did  he  take  out,  nor  have  the  defendants  ever  taken 
out,  the  said  new  patent  for  milling  previously  referred  to,  but  the  said 
G.  H.  Bovill  had  been  engaged  from  the  latter  end  of  the  year  1867  up  to 
the  time  of  his  last  illness  and  death  in  perfecting  his  improvements  for 
which  he  proposed  to  take  out  the  new  patent. 


SECT.  II.]  KNOWLES    r.    BOVILL.  525 

Upon  the  death  of  Mr.  Eovill,  the  plaintiff's  attorneys  wrote  the  follow- 
ing letter  to  his  executors  :  — 

"  In  May  last  we,  on  behalf  of  Mr.  John  Knowles  of  Nuneaton,  paid  the 
late  !Mr.  Bovill  150/.  for  the  free  use  for  ever  of  the  1849  patent,  for  what- 
ever time  it  might  be  prolonged,  as  well  as  the  free  use  for  three  years  of 
the  new  patent  for  milling  Mr.  Bovill  was  abotit  to  bring  out.  Unfortu- 
nately Mr.  Bovill  died  a  few  days  after  the  money  was  paid,  and  we  suppose 
no  application  has  been,  or  will  now  be  made  for  a  prolongation  of  the  lt^4'J 
patent,  and  that  our  client  will  lose  the  benefit  of  the  new  patent  which 
Mr.  Bovill  intended  taking  out.  This  being  so,  it  appears  to  us  that  the 
consideration  in  respect  of  which  Mr.  Knowles  paid  the  sum  of  150/.  wholly 
fails,  and  that  Mr.  Bovill's  executors  will  not  object  to  repay  that  sum  to 
Mr.  Knowles." 

To  this  letter  the  defendant's  attorneys  sent  the  following  answer  :  — 

"  The  executors  of  Mr.  Bovill  have  handed  us  your  letter  of  the  28th 
inst.  We  do  not  agree  with  your  construction.  Your  clients  made  a 
bargain  for  better  or  worse  ;  if  the  application  had  been  refused,  would 
you  then  have  claimed  a  return  of  the  money  ]  There  is  no  covenant  nor 
agreement  by  Mr.  Bovill  to  apply.  The  consideration  was  only  partly  for 
the  1849  prolongation  if  gi'anted,  the  chief  consideration  was  for  another 
invention  of  Mr.  Bovill's.  Had  this  been  secured  by  him,  your  client 
might  have  received  a  very  large  benefit  at  a  very  nominal  sun),  and  so 
the  right  to  call  on  Mr.  Bovill  for  a  license  of  such  new  invention,  if 
brought  out,  was  an  ample  consideration,  and  of  great  value.  Put  the 
very  frequent  case  of  a  person  taking  a  license  without  a  warranty  of 
validity,  and  the  patent  being  subsequently  upset,  and  that  too  witliin  a 
year  of  the  license,  which  may,  for  argument's  sake,  have  been  for  fourteen 
years.  It  has  been  held,  over  and  over  again,  that  the  licensee  must  con- 
tinue his  payments.  He  has  had  all  he  bargained  for.  Hero  Mr.  Knowles 
has  had  all  he  bargained  for,  the  right  to  call  upon  Mr.  Bovill  j)r;utically 
to  give  him  for  nothing  a  very  valuable  right.  We  see  no  groiuul,  morally 
or  equitably,  upon  which  your  client  can  ask  for  a  rebate  or  return  of  tlie 
150/.  It  was  clear  Mr.  Knowles  thought  the  renewal  was  of  a  very  ques- 
tionable nature,  but  he  bargained  with  Mr.  Bovill  for  the  150/.  to  shut  out 
every  contingency." 

The  question  f<u-  the  court  was,  whether  the  plaintiff  was  entitled  to  the 
return  of  the  150/. 

Qnain,  Q.  C,  for  the  plaintiff. 

Gart/t,  Q.  C,  with  him  ./.  C  Mathew,  for  defendants. 

Marti.v,  B.  —  In  my  opinion  the  plaintiff  is  entitled  to  our  judgment. 
The  true  test  in  this  ca.so  is  the  (jucstion,  What  did  ho  buy?  In  my 
opinion  ho  bought  an  application  for  the  grant  of  one  patent  anil   tho 


{526  KNO'WLES   V.   BOVILL.  [CHAP.  II. 

prolongation  of  the  other.  By  the  contract  he  was  to  take  the  cliance  of 
the  failure  or  success  of  such  application.  But  what  he  bought  was  an 
application.  The  result  is  that  the  consideration  in  this  case  wholly  fails, 
because  it  is  admitted  such  application  never  was  and  now  never  will  be 
made.  The  law  in  some  cases  implies  a  contract  when  the  parties  have 
not  expressly  made  one.  In  cases  of  the  total  failure  of  consideration  for 
a  simple  contract,  it  implies  a  contract  to  repay  the  money  which  has  been 
paid  for  the  consideration  that  has  so  failed.  If  I  thought  Mr.  Garth's 
contention  were  correct,  and  that  plaintiff  only  bought  the  chance  whether 
an  application  would  be  made  and  prove  successful,  the  case  might  be 
different,  but  I  do  not  think  that  is  the  true  meaning  of  the  contract. 

Bramwell,  B.  —  I  am  of  the  same  opinion.  The  plaintiff  manifestly 
paid  his  money  for  the  right  to  have  an  application  made  for  the  renewal 
of  the  one  patent  and  the  granting  of  the  other.  It  cannot  be  doubted 
that  if  Mr.  Bovill  had  lived  and  no  application  had  been  made,  the  plaintiff 
would  have  been  entitled  to  recover  his  money.  From  this  it  is  perfectly 
clear  he  bought  the  right  to  have  such  application  made.  In  point  of  fact 
it  was  not  made.  Then  why  is  his  claim  not  well  founded  1  Mr.  Garth 
invokes  a  rule  of  law  ;  he  claims  to  read  such  a  contract  with  a  qualification 
implied  by  law  that  Mr.  Bovill  is  only  bound  to  make  such  application  if 
he  lives ;  he  is  to  be  excused  by  death.  Mr.  Quain  may  fairly  say  then, 
"  I  am  entitled  to  add  a  qualification  to  that  qualification,  viz.,  that  if  he 
dies  the  money  shall  be  returned."  I  am  strongly  of  opinion  that  the  law 
ought  never  to  imply  terms  in  a  contract  unless  the  justice  or  necessity  of 
the  case  obviously  and  imperatively  demands  it.  But  if  a  party  contends 
that  there  is  such  a  qualification  when  the  engagement  is  of  a  personal 
character,  how  can  he  object  to  the  qualification  being  qualified  as  I  have 
pointed  out]  Can  anything  be  more  obviously  just  and  reasonable  1  Why 
should  the  contractor's  death  be  a  benefit  to  his  estate,  and  inflict  a  loss  on 
the  other  party  1  In  such  a  case  the  court  only  introduces  a  term  which 
it  is  satisfied,  not  perhaps  that  the  parties  intended,  but  that  they  would 
have  intended  if  they  had  contemplated  the  circumstances  which  have 
arisen. 

PiGOTT,  B.  —  I  am  of  the  same  opinion.  It  is  quite  clear  that  the  inten- 
tion of  the  parties  was  that  there  should  be  an  application  for  these  patents, 
and  that  such  application  formed  the  consideration  for  the  payment  of  the 
money.  There  never  was  any  such  application,  and  consequently  the  con- 
sideration wholly  failed. 

Cleasby,  B.  —  It  is  clear  that  what  plaintiff  bought  was  the  chance  of 
Mr.  Bovill  being  successful  in  his  apphcation  or  not,  not  the  chance  of  his 
making  it  or  not ;  that  would  have  left  it  in  his  option  to  make  it  or  not, 
whereas  it  was  admitted  if  he  had  lived  and  not  made  it  the  plaintiff  would 

have  recovered.  , 

Judgment  for  plaiiitiff. 


SECT,  II.]  WHINCUP  V.   HUGHES.  527 

WHINCUP  V.   HUGHES,   Executrix. 
In  the  Comjion  Pleas,  J.\nuary  27,   1871. 

[Rtported  in  Law  Ripoits,G  Common  Pleas,  78.  J 

AcTiox  in  the  Salford  Hundred  Court  against  the  defendant  as  cxecutri.x 
of  Thomas  Rogers  Hughes,  deceased. 

The  first  count  of  the  declaration  stated  that  the  testator  covenanted 
with  the  phiintiff  to  instruct  one  (Jeorge  Whincup,  the  younger,  during  the 
term  of  six  years,  from  the  31st  of  July,  1868,  in  the  business  of  a  w^itch- 
maker  and  jeweller.     Breach,  that  he  did  not  so  instruct  him. 

Second  count,  for  money  had  and  received  by  the  testator  for  the  use  of 
the  plaintiff,  and  for  money  had  and  received  by  the  defendant  as  executrix, 
for  the  use  of  the  plaintiff. 

Third  plea  {inter  alia)  to  the  first  count,  that  after  the  making  of  the 
said  covenant,  and  after  the  said  Thomas  Rogers  Hughes  had  for  the  space 
of  twelve  months  instructed  the  said  George  Whincup,  the  younger,  in  his 
said  business  according  to  his  said  covenant,  the  said  Thomas  Rogers 
Hughes  died,  and  was  thereby  prevented  from  any  further  performance  of 
his  said  covenant. 

To  the  rest  of  the  declaration,  never  indebted. 
Issues  and  demurrer  to  third  pica. 

At  the  trial  the  facts  appeared  to  be  as  follows  :  The  plaintiff  had  appren- 
ticed his  son  to  the  defendant's  testator,  a  watchmaker  and  jeweller,  by  a 
deed  bearing  date  the  '2Gth  of  November,  1868,  for  the  term  of  six  years, 
to  be  computed  from  the  preceding  31st  of  July.  The  plaintiff  covenanted 
to  pay  a  premium  of  251.  to  the  master,  and  provide  the  apprentice  with 
food  and  clothing  during  the  term,  in  consideration  whereof  the  master 
covenanted  with  the  plaintiff  to  instruct  the  apprentice  in  his  business,  and 
to  pay  him  wages  according  to  an  ascending  scale,  commencing  at  l*.  per 
week  during  the  first  year,  and  ending  at  10*-.  per  week  in  the  hust  year  of 
the  term.  The  plaintiff  \ni'ul  the  premium,  and  the  apprentice  was  duly 
instructed  up  to  the  14th  of  November,  1869,  when  the  defendant's  testator 
died. 

The  learned  judge,  upon  these  facts,  hcM  that  the  covenant  to  instruct 
the  ai)[)renticc  was  a  merely  personal  covenant,  which  was  put  an  end  to 
by  the  testator's  death,  and  that  the  ]tlaiMtiir  couM  not,  therefore,  recover 
on  the  first  count  ;  l)iit  he  held  that  the  i)Iaintiff  miglit  recover  a  part  of 
the  premium  paid  luidrr  the  common  counts,  on  the  ground  of  fujluro 
of  consideration.  The  verdict  was  tiiereupon  entered  for  the  plaintiff  for 
the  sum  of  15/.,  the  amount  found  liy  the  judge,  to  whom  the  question  of 


528  WHINCUP   V.   HUGHES.  [CHAP.  II. 

amount  was  left  by  consent ;  leave  being  reserved  to  the  defendant  to  move 
to  enter  a  nonsuit,  on  the  ground  that  neither  the  premium  paid  at  the 
commencement  of  the  apprenticeship,  nor  any  part  of  it,  was  recoverable 
back,  the  consideration  for  its  payment  not  having  failed,  either  wholly  or 
as  to  any  apportionable  part. 

A  rule  nisi  had  been  accordingly  obtained,  against  which 

J.  W.  Mellor  showed  cause. 

G.  B.  Ilughes  supported  the  rule. 

BoviLL,  C.  J.  This  is  an  action  brought  to  recover  a  part  of  the  pre- 
mium paid  upon  the  execution  of  an  apprenticeship  deed,  on  the  ground 
of  failure  of  consideration.  The  general  rule  of  law  is,  that  where  a  con- 
tract has  been  in  part  performed  no  part  of  the  money  paid  under  such 
contract  can  be  recovered  back.  There  may  be  some  cases  of  partial  per- 
formance which  form  exceptions  to  this  rule,  as,  for  instance,  if  there  were 
a  contract  to  deliver  ten  sacks  of  wheat  and  six  only  were  delivered,  the 
price  of  the  remaining  four  might  be  recovered  back.  But  there  the  con- 
sideration is  clearly  severable.  The  general  rule  being  what  I  have  stated, 
is  there  anything  in  the  present  case  to  take  it  out  of  such  rule  ]  The 
master  instructed  the  apprentice  under  the  deed  for  the  period  of  a  year, 
and  then  died.  It  is  clear  law  that  the  contract  being  one  of  a  personal 
nature,  the  death  of  the  master,  in  the  absence  of  any  stipulation  to  the 
contrary,  puts  an  end  to  it  for  the  future.  The  further  performance  of  it 
has  been  prevented  by  the  act  of  God,  and  there  is  thus  no  breach  of  con- 
tract upon  which  any  action  will  lie  against  the  executor.  That  being  so, 
can  any  action  be  maintained  otherwise  than  upon  the  contract  1  The 
contract  having  been  in  part  performed,  it  would  seem  that  the  general 
rule  must  apply  unless  the  consideration  be  in  its  nature  apportionable. 
I  am  at  a  loss  to  see  on  what  principle  such  apportionment  could  be  made. 
It  could  not  properly  be  made  with  reference  to  the  proportion  which  the 
period  during  which  the  apprentice  was  instructed  bears  to  the  whole  term. 
In  the  early  part  of  the  term  the  teaching  would  be  most  onerous,  and  the 
services  of  the  apprentice  of  little  value ;  as  time  went  on  his  services  would 
probably  be  worth  more,  and  he  would  require  less  teaching.  There  ap- 
pears to  be  no  instance  of  a  similar  nature  to  the  present  in  which  an. 
action  for  the  return  of  a  part  of  the  premium  has  been  brought.  There 
have  been  attempts  to  recover  part  of  the  premium  in  the  case  of  articled 
clerks.  In  Ex  parte  Bayley  ^  which  has  been  cited,  the  decision  was  not  put 
on  the  ground  of  legal  liability,  but  of  the  authority  exercised  by  the  court 
over  one  of  its  own  officers.  In  the  case  of  Re  Thompson,^  than  which  a 
stronger  case  could  hardly  exist,  inasmuch  as  there  the  clerk  died  within 
a  month  after  a  premium  of  over  200^.  was  paid,  an  application  was  made 
to  the  court  in  the  exercise  of  its  summary  jurisdiction,  but  they  declined  to 
order  the  return  of  any  part  of  the  premium.  It  was  assumed  in  that  case 
1  9  B.  &  C.  691.  2  I  Ex.  864. 


SECT.  II.]  WHINCUP   V.   HUGHES.  529 

that  no  action  at  law  could  lie,  for  otherwise  the  application  would  have 
been  unnecessary.  Thus  it  appears  that  even  on  application  to  the  extraor- 
dinary jurisdiction  of  the  court  over  its  own  officer,  the  Court  of  E.\chequer 
deliberately  came  to  the  conclusion  that  neither  in  law  nor  in  justice  was 
there  any  right  under  such  circumstances  to  a  return  of  premium.  With 
regard  to  the  justice  of  such  a  case,  it  is  clear  that  it  would  be  almost  impos- 
sible to  estimate  what  the  master  might  on  his  side  have  lost  by  the  loss  of 
the  service  of  the  apprentice.  Again,  the  person  receiving  the  premium  nat- 
urally assumes  that  it  becomes  his  property  to  be  dealt  with  as  he  pleases  ;  he 
is  perfectly  ready  to  perform  his  part  of  the  contract ;  he  never  undertakes 
to  return  any  part  of  the  premium,  and  the  necessity  for  sucli  return  is  never 
contemplated.  We  have  been  pressed  with  the  authority  of  the  case  of 
Hirst  V.  Tolson,^  where,  an  attorney  having  died,  the  Lord  Chancellor  or- 
dered the  return  of  a  part  of  the  premium  paid  by  an  articled  clerk.  But 
this  decision  expressly  proceeded  on  the  supposition  that  such  part  of  tlie 
premium  would  be  a  debt  in  law,  although  the  Lord  Cuanxellor  came  to 
the  conclusion  that  under  the  circumstances  it  was  not  necessary  to  send  the 
plaintiflF  to  seek  a  remedy  in  a  court  of  law,  but  he  might  recover  in  ctpiity. 
The  Lord  Chancellor  refers  to  the  case  of  Stokes  v.  Twitchin  '  as  est.-iblish- 
ing  the  principle  that  where  there  is  such  a  partial  failure  of  oonsideration, 
an  action  is  maintainable.  On  referring  to  that  case  it  appears  that  it  is  no 
authority  for  any  such  proposition.  In  that  case  the  indenture  was  void 
for  breach  of  the  provisions  of  a  statute.  The  plaintiff  claimed  the  whole 
premium  back  on  the  ground  of  total  Hiilure  of  consideration.  Tliere  is  no 
doubt  that  money  had  and  received  will  lie  upon  such  a  failure  of  consider- 
ation, though  the  plaintiff  failed  in  that  case  on  the  ground  that  he  was 
himself  party  to  the  illegality. 

With  regard  to  the  equity  of  the  case,  the  Lord  Chancellor  refei-s  to 
two  former  decisions  in  the  time  of  Vernon  and  Finch,  which  appear  to  be 
Soam  V.  Bowden  «  and  Newton  v.  Rouse.''  On  referring  to  the  report  of  tho 
former  case  in  Finch,  it  appears  that  there  the  master  had  received  a  pre- 
mium of  250^.  and  died  within  two  years,  and  a  bill  having  been  filed 
against  the  executors  for  the  return  of  a  portion  of  tho  premium,  it  is  stated 
that  the  executors  said  that  they  would  be  willing  to  do  whatever  tho  court 
should  direct  in  the  matter.  It  is  quite  consistent  with  this  report  that 
the  executors  really  did  not  contest  the  point,  but  submitted  to  what  tho 
court  might,  under  tho  circumstances,  think  just.  The  case  of  Xewtc.u  v. 
Rouse*  is  certainly  a  very  remarkable  case,  because  there  the  agreement 
contained  an  express  provision  that  in  case  of  death  GO/,  sliould  be  returned, 
and  on  a  bill  being  filed,  the  court  decreed  the  return  of  100/.  This  is 
certainly  wholly  inconsistent  with  the  principles  regulating  the  interpreta- 
tion of  contnicts  both  at  law  and  equity.      The  only  possible  ground  on 

«  2  Mftc.  &  O.  134  ;  19  L.  J.  Cli.  Uh  a  8  Tmiiit.  4V2. 

«  Finch,  396.  *  1  Win.  ico. 

34 


530  WHINCUP   V.    HUGHES.  [CHAP.  II. 

which  the  decision  can  be  explained  is  that  mentioned  by  the  note  to  the 
case  in  the  3d  ed.  of  Vernon,  by  Mr.  Eaithby,  and  referred  to  in  1  Story's 
Equity  Jurisprudence,  10th  ed.,  p.  472,  viz.,  that  it  must  have  been  a  case 
of  mutual  mistake,  misrepresentation,  or  unconscientious  advantage  taken 
by  one  side  of  the  other.  Under  these  circumstances,  it  does  not  appear 
to  me  that  the  case  of  Hirst  v.  Tolson  ^  is  a  satisfactory  authority  or  one  by 
which  we  are  bound.  It  appears  to  be  based  on  a  misapprehension  of  the 
law  on  the  subject,  and  is  distinctly  contrary  to  the  opinion  of  the  Court 
of  Exchequer  in  Re  Thompson.*  For  these  reasons  I  think  the  rule  ought 
to  be  made  absolute. 

WiLLES,  J.  I  am  of  the  same  opinion.  We  have  no  jurisdiction  to 
override  the  intention  of  the  parties  as  expressed  in  the  contract  of  appren- 
ticeship. The  effect  of  that  contract  is  clear.  In  consideration  of  the  pre- 
mium the  master  undertakes  to  teach,  and  the  apprentice  undertakes  to 
serve  for  a  period  of  six  years  if  they  both  shall  live  so  long.  If  this,  which 
is  the  true  legal  construction  of  this  contract,  were  set  out  in  so  many 
words,  it  would  seem  extraordinary  that  there  should  be  any  claim  for  a  re- 
payment of  premium  on  the  death  of  either  of  the  parties.  But  it  is  a  well- 
known  rule  of  law  that  every  contract  must  be  construed  as  if  those  terms 
which  the  law  will  imply  were  expressly  introduced  into  it.  Such  being 
the  contract,  if  the  apprentice  died,  could  the  master  be  called  upon  to 
refund  any  part  of  the  premium  1  No  suggestion  to  that  effect  was  made. 
Then  why  should  there  be  any  difference  in  case  of  the  master's  death  %  In 
some  particular  cases  there  might  be  a  reason.  There  might  be  a  custom 
in  relation  to  the  subject.  No  suggestion  is  made  of  any  such  custom  here, 
but  in  2  Williams  on  Executors,  Gth  ed.  p.  1631,  a  custom  in  London  is 
mentioned,  that  in  such  a  case  the  executors  shall  get  the  apprentice  trans- 
feired  to  some  other  master  of  the  same  trade.  In  such  a  case,  however, 
the  action  must  be  on  the  custom,  not  for  money  received. 

The  decision  in  the  case  of  Hirst  v.  Tolson  ^  does  not  appear  satisfactory, 
for  the  reasons  given  by  my  Lord.  With  the  utmost  respect  to  the  au- 
thority of  the  eminent  Chancellor  who  decided  it,  with  regard  to  the  ques- 
tion of  equity,  I  must  confess  that  the  justice  of  that  decision  appears  to 
me  very  doubtful.  The  executors  there  seem  to  have  offered  to  get  the 
clerk  placed  in  the  office  of  another  attorney  without  premium,  and  that 
having  been  declined  they  were  made  to  refund  money  which  the  testator 
had  probably  spent  long  before  his  death  without  ever  contemplating  the 
necessity  of  refunding  it.  I  must  say  that  the  doctrine  of  the  common  law 
which,  except  in  the  instance  of  the  paternal  or  masterful  jurisdiction  of 
the  court  over  its  own  officers,  does  not  compel  any  return  on  the  partial 
failure  of  consideration,  appears  to  me  on  the  whole  preferable  to  an  equity 
so  doubtful  as  this.  In  1  Williams'  Saunders,  p.  313,  the  case  of  an  ap- 
prentice running  away  is  mentioned,  and  Cuff  v.  Brown®  is  referred  to, 
1  2  Mac.  &  G.  134;   19  L.  J.  Ch.  441.  2  i  Ex.  864.  »  5  Price,  297. 


SECT.  II.]  WHINCUP   V.   HUGHES.  531 

where  iu  such  a  case,  the  master  haviug  refused  to  take  back  tlie  appren- 
tice, the  court  held  that  it  could  not  order  any  return  of  premium.  It  is 
there  stated  that  in  the  case  of  an  attorney's  clerk  the  Court  of  King's 
Bench  decided  otherwise,  considering  that  they  had  a  more  extensive  au- 
thority, and  the  cases  of  Ex  parte  Prankerd  ^  and  Ex  jxirte  Bayley  '  are 
referred  to  as  instances.  In  2  Williams  on  Executors,  Gth  ed.  p.  1G31,  the 
case  of  Hirst  v.  Tolson  *  is  treated  as  applicable  to  attorneys  only,  and  being 
an  exercise  of  the  equitable  jurisdiction  of  the  Court  of  Chancery. 

Montague  Smith,  J.  I  am  of  the  same  opinion.  Independently  of  the 
rule  of  law,  that  an  action  for  money  had  and  received  can  only  be  brought 
when  there  is  a  total  failure  of  consideration,  with  the  exception  of  a  few 
Civses  which,  on  being  analyzed,  hardly  prove  to  be  exceptions,  I  think  this 
case  is  clear  as  a  question  of  intention  between  the  parties.  The  contract 
is  a  written  one,  and  if  on  a  consideration  of  its  terms  we  should  come  to 
the  conclusion  that  the  parties  did  not  mean  that  in  case  of  death  there 
should  be  a  return  of  the  premium,  the  defendant  will,  of  course,  not  bo 
liable.  The  contract  is,  that  in  consideration  of  25/.  paid  at  the  time  of 
its  execution,  the  master  will  teach  for  six  years ;  and  the  contract  is  sub- 
ject to  an  implied  condition  that  both  parties  should  so  long  live,  for,  being 
a  mere  personal  undertaking,  it  is  only  iu  such  case  that  it  can  be  per- 
formed. Now,  I  cannot  imply  from  such  a  contract  that  the  parties  meant 
that  in  case  of  death  any  part  of  the  premium  should  bo  returned.  If 
they  had  so  meant  there  would  have  been  no  difficulty  in  expressly  pro- 
viding for  such  a  contingency.  We  should,  I  think,  be  doing  violence  to 
the  terms  of  the  instrument  if,  as  a  presumption  of  law  or  fact,  we  added 
any  such  condition.  The  parties  must  be  taken  to  have  considered  the 
possibility  that  one  of  them  might  die.  In  the  case  of  the  apprentice's 
death,  or  permanent  illness  during  the  later  years  of  the  term,  the  loss  to 
the  master  might  be  considerable  ;  might  be  even  of  greater  value  tlian 
the  premium,  for  the  services  form  a  considerable  part  of  the  consideration 
for  the  master's  contract.  The  master  in  such  case  could  recover  no  com- 
pensation for  his  loss:  see  Boast  v.  Firth.*  Under  these  circumstances,  it 
seems  to  me  that  the  parties,  if  they  intended  that  there  should  bo  any 
return  of  premium,  would  have  provided  for  it.  Moreover,  it  appeara  to 
me  clear  that  the  action  for  money  received  cannot  lie  where  the  contract 
lias  been  partly  performed  on  both  sides.  To  ascertain  the  amount  which 
equity  in  such  a  case  requires  to  be  returned,  it  would  be  necessary  to  go 
into  a  great  variety  of  considerations,  the  relative  weight  of  which  it  would 
1)0  almost  impossible  correctly  to  estimate:  e.g.,  the  value  of  the  stTvico  lost 
to  the  master,  and  the  degree  to  which  the  apprentice  had  pri)lit»'d  by  the 
instruction.  It  would  be  impossible  to  take  merely  tlio  proportion  of  the 
time  which  had  clap.sed  to  the  whole  term  as  the  standard  of  measurement. 

1  3  B.  &  A.  257.  ^  <d\\.  kC.  091. 

»  2  Mac.  &  G.  134;  I'J  L.  J.  Ch.  411.  «  I,.  K.  4  C  I'.  1. 


532  ANGLO-EGYPTIAN   NAVIGATION   CO.   V.   RENNIE.         [CHAP.  II. 

My  Lord  and  my  Brother  Willes  have  gone  so  fully  into  the  authorities 
that  I  need  say  nothing  further  about  them,  except  that  the  mere  fact  that, 
while  similar  cases  to  the  present  must  be  of  such  frequent  occurrence,  no 
case  of  an  attempt  to  recover  back  part  of  the  premium  is  to  be  found  in 
the  books,  except  with  respect  to  an  articled  clerk,  is  of  itself  an  authority 
against  the  plaintiff. 

Brett,  J.  I  am  of  the  same  opinion,  and  to  my  mind  the  case  is  very 
clear.  By  the  contract  a  specific  sum  is  paid  to  the  testator  in  respect  of 
a  continuing  consideration,  viz.,  a  personal  duty  to  be  performed  for  six 
years  if  both  parties  should  live  so  long.  There  is  no  express  stipulation 
for  any  return  of  the  premium  or  any  part  of  it.  The  death  of  the  testa- 
tor is  no  breach  of  the  contract,  and  the  question  therefore  is,  whether, 
there  being  no  breach  on  his  part,  his  executors  can  be  made  to  return  the 
premium  or  any  part  of  it.  Kow  the  case  cannot  be  brought  within  the 
rule  of  law  relating  to  total  failure  of  consideration,  or  mutual  rescission 
of  a  contract.  It  comes  within  the  rule  that  where  a  sum  of  money  has 
been  paid  for  an  entire  consideration,  and  there  is  only  a  partial  failure  of 
consideration,  neither  the  whole  nor  any  part  of  such  sum  can  be  recov- 
ered. No  authority  has  been  cited  in  favor  of  the  plaintiff  at  common  law. 
1  express  no  opinion  as  to  the  decisions  in  equity  that  have  been  cited, 
inasmuch  as  we  are  not  now  exercising  an  equitable  jurisdiction,  and,  there- 
fore, they  do  not  appear  to  me  applicable.  The  decisions  with  regard  to 
articled  clerks  seem  to  be  strong  authorities  for  the  defendant,  inasmuch  as 
even  when  the  court  did  interfere  to  compel  a  return  of  the  premium,  they 
felt  obliged  to  justify  the  strong  measure  of  exercising  jurisdiction  to  modify 
the  contract  of  the  parties,  by  saying  that  they  did  so  in  the  exercise  only 

of  their  authority  over  their  own  officer. 

Bute  absolute. 


ANGLO-EGYPTIAN   NAVIGATION  COMPANY  v.   EENNIE 
AND  Another. 

In  the  Common  Pleas,  February  25,  1875. 

[Reported  in  Law  Reports,  10  Common  Pleas,  271.] 

Special  Case  stated  in  an  action  for  the  detention  of  certain  boilers  and 
machinery,  and  for  the  recovery  of  two  sums  of  2000^.  paid  by  the  plain- 
tiffs to  the  defendants. 

The  facts  of  the  case  sufficiently  appear  from  the  judgment. 

H.  Matthews,  Q.  C,  Artlmr  WUso7i  with  him,  for  the  plaintiffs. 

Benjamin,  Q.  C,  for  the  defendants. 


SECT.  II  ]  ANGLO-EGYPTIAN    NAVIGATION   CO.    V.    RENNIE.  533 

Feb.  2').  The  judgment  of  the  court  (Lord  Coleridge,  C.  J.,  aud  Gkove 
and  Denmax,  JJ.,^)  was  delivered  by 

Dexmax,  J.  This  was  a  special  case  stated  witliout  pleadings  in  an 
action  in  which  the  plaintiffs  claimed  to  recover  certain  boilers  and  ma- 
chinery detained  by  the  defendants,  with  damages  for  their  detention,  or  to 
recover  back  two  sums  of  2000/.  each,  paid  by  the  plain titls  to  the  defend- 
ants as  stated  in  the  case.  In  case  our  judgment  shoidd  be  for  the  plain- 
tiffs for  the  recovery  of  the  goods,  judgment  was  to  be  entered  for  5000/., 
to  be  reduced  to  -iOs.  on  the  goods  being  delivered  up.  In  case  we  should 
decide  A)r  the  i)laintifls  on  the  other  ground,  judgment  was  to  be  entered 
for  4000/.  The  two  questions  for  the  court  therefore  are,  whether,  under 
the  circauistanoes  of  the  cas?,  either  detinue  or  money  had  aud  received 
could  be  maintained. 

The  material  facts  of  the  case  were  as  follows:  On  the  IStli  of  Decem- 
ber, 1871,  the  plaintiffs,  a  shipping  company  in  London,  being  owners  of 
two  steamships,  the  Minia  and  the  Scandcria,  entered  into  a  written  con- 
tract with  the  defendants,  engineers  in  London,  which  is  set  out  in  the 
special  case,  and  the  terms  of  which,  so  far  as  they  arc  material,  are  as 
follows  :  — 

The  engineers  agree  to  make  and  sujiply  to  the  company  new  marine 
boilers  and  various  parts  of  machinery  for  the  screw-steamers  Minia  and 
Scanderia  belonging  to  the  company,  and  to  alter  the  engines  of  those 
steamers  into  compound  surface  condensing  engines,  according  to  specifica- 
tion annexed.  The  engines  and  boilers  aud  connections  are  to  be  com- 
pleted in  every  way  ready  for  sea  so  far  as  specified,  antl  tried  under  steam 
by  the  engineers  previous  to  being  handed  over  to  the  company ; 'the 
result  of  such  trial  to  be  to  the  satisfaction  of  the  company's  inspector. 

The  work  to  be  commenced  without  delay,  and  com{)leted  with  all 
reas(jnal)Ie  disjjatch.  Due  notice  shall  be  given  by  the  company  to  the 
engineers  of  tlie  date  at  which  the  steamers  will  be  placed  in  their  hands 
after  the  work  is  ready,  to  have  the  engines  comi)Ieted.  Each  of  tlie 
steamers  shall  be  completed  ready  for  sea  within  sixty  working  days  from 
the  date  at  whicli  she  is  placed  in  the  hands  of  the  engineers. 

The  price  to  he  paid  by  the  company  to  the  engineers  in  respect  of  this 
agreement  shall  be  the  sum  of  5800/.  for  each  steamer,  payable  as  the 
work  progrijsses,  in  the  following  manner,  viz.  When  the  boilers  are 
jtlated,  2000/.,  half  cash,  half  by  the  company's  acceptance  at  four  nionths' 
(late  ;  when  tiie  whole  of  the  work  is  ready  for  fixing  on  board,  2000/., 
half  cash,  h  lif  l)y  the  company's  acceptance  at  four  months*  date  ;  when 
each  steaujcr  is  fully  completed  and  tried  under  steam,  1800/.,  whereof 
1000/.  cash,  and  800/.  in  acceptances  at  four  months.  All  bills  to  bo 
approved. 

The  contract  then  contained  a  guarantee  by  tlie  engineers  ngniust  bad 

1  Keating,  J.,  wlio  la-ard  llic  nrguiiuut,  liud  rcbigtiud  at  tin-  cn.l  (if  Ililmy  tnin. 


534  ANGLO-EGYPTIAN   NAVIGATION   CO.    V.    RENNIE.        [CHAP.  II. 

materials  or  workmanship,  and  an  undertaking  to  make  good  for  six 
months  ;  and  then  it  continued  as  follows  :  — 

"  All  the  work  hereby  contracted  to  be  done  by  the  engineers  shall  be 
executed  to  the  satisfaction  of  John  Pile,  or  other  the  company's  inspector 
for  the  time  being ;  and  all  the  payments  agreed  to  be  made  by  the  com- 
pany shall  only  be  made  on  the  certificate  of  such  inspector  that  the  condi- 
tions entitling  the  engineers  to  receive  such  payment  have  been  fulfilled." 

The  contract  contained  an  arbitration  clause. 

The  specification  referred  to  in  the  contract  was  headed  "  The  woi-k 
hereby  specified  to  be  done  to  each  of  the  steamers  Minia  and  Scanderia," 
and  contained,  amongst  other  matters,  the  following  provisions  and  require- 
ments :  — 

"  Four  new  boilers  of  oval  form  to  be  fitted  and  fixed  on  board  ;  each 
boiler  to  have  two  furnaces,  and  to  be  provided  with  all  necessary  fittings," 
etc. ;  "  the  boilers  to  be  cleaded  with  felt  and  wood,  or  patent  cement,  as 
may  be  determined,  with  all  necessary  piping  to  fit  and  fix  them  to  the 
engines ;  funnel  casings  to  be  removed  and  replaced  ;  old  boilers  to  be  cut 
up  in  ship,  and  removed  in  pieces,  so  as  not  to  disturb  the  deck." 

Then  followed  provisions  relating  to  alterations  to  be  made  in  the  cylin- 
ders, and  providing  several  articles,  such  as  new  cylinder  covers  to  be  put 
on  the  old  cylinders,  with  glands,  slide-rods,  and  "  all  that  may  be  neces- 
sary to  make  the  engines  complete  compound  and  surface  condeusing 
engines." 

Then  followed  a  provision  that  a  surface  condenser  containing  2000 
cubic  feet  of  tube  cooling  surface  was  to  be  supplied  ;  and  immediately 
afterwards  it  was  specified  as  follows  :  "  One  of  the  present  air-pumps  to 
be  ai-ranged  as  a  circulating  pump  ;  both  the  pump  and  the  other  air-pump 
now  in  the  ship  to  have  foot-valves  fitted,  if  they  are  not  so  at  present  ;" 
'*  waste-water  valves  to  be  fitted  to  ship ;  the  present  waste-water  valve 
chest  to  remain  for  the  air-pumps'  discharge  ;  "  "  all  present  piping  in  con- 
nection with  boilers  to  be  condemned,  and  replaced  with  copper  piping 
sufficient  to  bear  the  increased  pressure  ;  "  "  all  brasses  to  be  set  together, 
and  the  whole  job  to  be  put  in  thorough  working  order  so  f;ir  as  the  new 
work  is  concerned  ; "  "  in  conclusion,  it  is  intended  that  the  engineers 
shall  remove  the  present  boilers  and  such  parts  of  the  machinery  as  may 
be  necessary  to  make  the  above  alterations,  giving  new  boilers  and  com- 
plete machinery  instead,  and  so  as  to  comply  with  the  requirements  of  the 
Board  of  Trade,  whose  certificate  they  are  to  obtain  as  far  as  the  work 
which  they  engage  to  do  extends." 

The  case  finds  that  under  the  contract  the  whole  of  the  old  materials  to 
be  necessarily  taken  from  each  ship  by  reason  of  the  execution  of  the 
work  contracted  to  be  done  would  become  the  property  of  the  defendants, 
and  that  the  value  of  such  old  materials  in  each  ship  was  353/.  At  the 
date  of  the  contract,  the  18th  of  December,  1871,  the  Scanderia  was  in  the 


SECT.  II.]  ANGLO-EGYPTIAN    NAVIGATION    CO.    V.    RENNIE.  535 

port  of  London.     The  contract,  so  far  a8  relates  to  the  Minia,  was   per- 
formed on  both  sides  ;  and  no  qnestion  arises  as  to  that  ship. 

On  the  28th  of  June,  1872,  the  plaintiffs  gave  notice  to  the  defendants 
that  the  Scauderia  was  ready  to  be  placed  in  their  hands  on  the  1st  of 
August  next,  to  receive  her  boilers  and  machinery.  But,  upon  hearing 
from  the  defendants  on  the  28th  of  June  that  they  could  not  promise  to  be 
ready  by  the  1st  of  August,  the  plaiutitls  determined  to  send  her  on 
another  voyage.  She  sailed  from  Cardiff  accordingly  in  August,  ami  on 
her  return  voyage  was  lost  by  perils  of  the  sea. 

On  the  loth  of  August,  1872,  the  boilers  for  the  Scanderia  were  plated. 
On  the  27th  of  August  the  plaintiffs'  inspector  certified  that  tlie  defendants 
were  entitled  to  receive  the  first  sum  of  2000/.  in  respect  of  that  ship  ; 
and  on  the  28th  of  August  the  plaintiffs  paid  the  same  in  the  manner 
provided  by  the  contract. 

On  the  4th  of  January,  1873,  the  whole  of  the  work  was  ready  for  fixing 
on  board  the  Scanderia,  and  on  the  15th  the  plaintiffs'  inspector  so  certi- 
fied, and  that  the  conditions  entitling  the  defendants  to  the  second  sum  of 
2000/.  had  been  fulfilled  j  and  the  plaintiffs  on  the  17th  of  January  paid 
that  sum  as  before.  At  the  time  of  the  Lvst-mentioncd  payment,  the 
plaintiffs  knew,  but  the  defendants  did  not  know,  of  the  loss  of  the 
vessel. 

On  the  25th  of  April,  1873,  the  defendants,  having  heard  of  the  loss  of 
the  Scanderia,  wrote  reqtiesting  the  plaintiffs  "  to  pay  the  balance  due  on 
the  contract,  amounting  to  1800/."  On  the  2Gth  the  plaintiffs  replied  that, 
"  looking  at  the  work  which  the  defendants  had  not  been  called  upon  to 
perform,  they  considered  that  they  had  already  paid  all  that  they  could  be 
required  to  pay  in  respect  of  the  engines,  if  indeed  they  hud  not  already 
paid  more  than  a  proportionate  part  of  the  contract  price." 

On  the  10th  of  May,  1873,  the  plaintiffs  gave  notice  to  the  d<>fondant8 
stating  that  the  contract  of  the  18th  of  December,  1871,  having  come  to 
an  end,  they  required  the  defendants  to  deliver  to  the  plaintiffs  the  bt)iler8 
and  other  machinery  and  things  made  by  the  defendants  under  the  con- 
tract, and,  in  default  of  delivery,  threatened  proceedings.  On  the  2l8t  of 
May  the  defendants'  solicitors  wrote,  stating  that  the  deft-ndants  were  wil- 
ling to  hand  over  the  boilers  and  other  machinery  asked  fur,  "  on  being 
paid  the  amount  of  their  lien."  Subsequently,  on  the  23d  and  28th  of 
May,  in  answer  to  letters  of  inquiry  as  to  their  meaning,  the  defnidantH' 
solicitors  wrote  that  the  amount  claimed  l)y  the  dcfcinlaiits  as  (heir  lien 
was  the  amount  of  the  last  instalment  umler  llii-  o infract,  viz.,  ISOO/. 
They,  however,  proposed  that  the  (piestion  sliould  l)e  disposed  of  undi-r  tlio 
arbitration  clause,  which  offer  was  (h.-clined  by  the  plaintiffs. 

The  case  further  stated  :  "  The  total  sums  paid  under  the  contract  by 
the  plaintiffs  to  the  defendants  are,  nHOO/.,  in  respect  of  the  Minia,  and  the 
two  above  mentioned  sums  of  2000/.  each  in  respect  of  tlie  Scanderiiv,     'I'ho 


536  ANGLO-EGYPTIAN  NAVIGATION   CO.   V.   EENNIE.  [CHAP.  II. 

defendants  have  received  the  old  materials,  valued  at  353/.,  out  of  the  Min- 
ia.  No  offer  of  any  further  sum  has  been  made  by  tlie  plaintiffs  to  the  de- 
fendants. The  defendants,  at  the  date  when  they  heard  of  the  loss  of  the 
Scanderia,  had  completed  71  per  cent  of  the  whole  work  contracted  for  in 
respect  of  the  Scanderia.  At  that  date  the  price  of  labor  and  materials 
was  higher  than  at  the  date  of  the  contract." 

A  careful  perusal  of  the  specification  seems  to  us  to  establish  that  the 
contract  was  for  one  entire  job,  for  which  5800/.  was  to  be  received  on  one 
side,  and  353/.  value  in  old  materials  on  the  other.  The  full  performance 
of  this  contract  having  been  rendered  impossible  by  the  loss  of  the  Scan- 
deria, we  think  that  the  plaintiffs  cannot  maintain  that  any  property  has 
passed,  and  that  therefore  the  claim  in  detinue  fails. ^ 

The  second  ground  upon  which  the  plaintiffs  rested  was  a  claim  to  be 
repaid  the  two  sums  of  2000/.  paid  by  them,  as  money  had  and  received. 
With  regard  to  the  first  of  these  sums,  it  seems  to  us  to  be  clear  that  it 
was  paid  in  pursuance  of  the  contract,  and  under  such  circumstances  that 
the  parties  could  not  be  placed  in  statu  quo  by  its  repayment.  The  boilers 
certified  to  be  plated  may  have  been  either  of  more  or  less  value  than 
2000/.,  or  of  more  or  less  profit  or  loss  relatively  to  the  rest  of  the  subject- 
matter  of  the  contract.  The  defendants  are  guilty  of  no  wrong  in  not  hav- 
ing fitted  the  boilers  in  question  to  the  plaintiffs'  ship.  It  seems  quite 
plain  that,  if  the  ship  had  perished  during  the  currency  of  the  bill  at  four 
months  given  for  the  second  1000/.  payable  upon  the  plating  of  these 
boilers,  that  would  have  been  no  answer,  as  between  the  parties,  to  an 
action  on  the  bill. 

With  regard  to  the  second  2000/.,  there  is  a  still  further  objection  to  its 
recovery  in  an  action  for  money  had  and  received.  Before  the  plaintiffs 
paid  that  sum  to  the  defendants,  they  were  aware  of  the  loss  of  the  Scan- 
deria ;  and  the  defendants  were  not  aware  of  it.  It  cannot,  therefore,  be 
maintained  that  it  was  paid  by  the  plaintiffs  upon  a  consideration  which 
has  since  failed  ;  for  it  was  paid  with  knowledge  of  the  facts,  which  were 
unknown  to  the  defendants. 

We  are  therefore  of  the  opinion  that  the  plaintiffs  have  failed  to  sustain 

either  of  the  grounds  upon  which  alone  they  contended  that  any  right  of 

action  against  the  defendants  could  be  supported,  and  that  we  are  bound 

to  give  judgment  for  the  defendants. 

Jiidgment  for  the  defendants.^ 

^  The  discussion  of  this  question  has  been  omitted.  —  Ed. 

2  The  plaintiffs  iu  this  brought  error  to  the  Court  of  Exchequer  Chamber,  but  on 
the  suggestion  of  the  court  the  matter  was  submitted  to  arbitration,  and  no  judgment 
was  given.     L.  R.  10  C.  P.  571.  —  Ed. 


SECT.  II.]  GRIGGS   V.    AUSTIN.  537 

NATHANIEL  GRIGGS   ei  al.   v.   SAMUEL  AUSTIN  et  al. 
In  the  Supreme  Judicial  Court  of  Massachusetts,  March  Term,  1825. 

[Reported  in  3  Pickering,  20.] 

Assumpsit  for  moiiey  had  and  received  and  for  money  lent  and  accom- 
modated. 

The  plaintiffs,  to  maintain  their  action,  offered  to  prove,  that  in  Novem- 
ber, 1822,  they  shipped  on  board  the  ship  Topaz  nine  hundred  and  four 
barrels  of  apples,  to  be  carried  to  the  port  of  Liverpool,  and  tliat  freight 
was  paid  in  advance  to  the  defendants,  they  being  owners  of  the  ship 
for  the  intended  voyage ;  that  no  deduction  was  made  from  the  usual 
freight  on  account  of  advance  payment,  and  that  there  was  no  agreement 
that  freight  was  to  be  allowed  at  all  events  ;  that  the  ship  was  stranded  at 
Crosby,  about  six  miles  below  the  port  of  Liverpool,  and  that  the  greater 
part  of  the  apples  belonging  to  the  plaintiffs  was  lost. 

The  defendants  objected  to  this  evidence,  contending  that  the  freight 
having  been  paid  in  advance,  they  were  not  liable  to  repay  it,  the  apples 
being  lost  without  their  fault,  and  there  having  been  no  agreement  to  re- 
fund in  case  of  such  loss. 

This  objection  the  judge  overruled,  intending  however  to  reserve  the 
question.  The  plaintiffs  accordingly  proved  the  stranding  of  the  vessel 
and  the  loss  of  the  apples. 

In  the  bill  of  lading  it  was  expressed,  that  the  apples  were  to  be  de- 
livered "  in  the  like  good  order  and  well-conditioned,  at  the  aforesaid  port  of 
Liverpool,  the  danger  of  the  seas  only  excepted,  unto  Mr.  William  Graves 
[one  of  the  plaintiffs]  or  to  his  assigns,  he  or  they  paying  freight  for  the 
said  goods  nothing,  being  paid  here." 

W.  Prescott  and  /.  2\  Austin  for  the  defendants. 

S.  Hubbard  for  the  plaintiffs. 

Parker,  C.  J.  This  action  is  indeJiitntus  assumpsit  on  money  counts.  It 
is  brought  to  recover  back  a  sum  of  money  paid  by  the  plaintills  to  the 
defendants  for  the  freight  of  a  number  of  barrels  of  apjjles  taken  on  board 
their  ship,  the  Topaz,  bound  from  IJoston  to  Liverpool.  It  is  proved  by  tho 
1)111  of  lading  signed  by  the  master,  and  an  accoimt  niade  out  by  the  owners, 
with  their  receipt  upon  it,  that  tlio  whole  freight  agreed  upon  was  i)aid 
before  the  sailing  of  tho  vessel,  and  the  report  finds,  that  before  the  vcssfl 
arrived  at  her  port  of  delivery  abroad,  she  was  stranded  or  wrecked  on  a 
beach  within  six  miles  of  her  port,  by  means  of  which  a  largi'  portion  of  tiio 
plaintiffs'  apples  were  destroyed,  or  rendered  worthless  by  tho  Halt  water. 

This   brief  statement  presents  tho  principal    question  which   has  been 


538  GRIGGS   V.   AUSTIN.  [CHAP.  II. 

argued ;  there  are  other  facts  in  the  report  material  to  some  inferior 
questions,  which  will  be  stated  in  their  proper  place. 

The  plaintiffs  contend  that  the  consideration  for  the  payment  of  the 
money  was  the  agreement  on  the  pai't  of  the  owners  to  transport  the  apples 
in  their  ship  to  Liverpool ;  and  that  having  failed  to  do  this,  they  are 
bound  in  conscience  to  return  the  money ;  and  that  an  action  at  law  lies 
for  it,  upon  the  ground  of  failure  of  consideration.  The  defendants  insist, 
that  the  payment  of  the  freight  in  advance  imposes  all  risks  upon  the 
owner  of  the  goods,  and  that  the  failure  of  transportation  and  delivery 
having  happened  without  their  fault,  there  is  no  legal  nor  equitable  prin- 
ciple which  will  oblige  them  to  refund.  Some  reliance  in  support  of  their 
defence  is  placed  upon  the  condition  expressed  in  the  bill  of  lading,  that 
the  goods  are  to  be  delivered  safely,  "  the  dangers  of  the  seas  excepted  ;  " 
but  as  this  condition  has  in  practice  been  applied  only  to  the  contract  in 
relation  to  the  goods  themselves,  so  as  to  protect  the  ship-owner  from  a 
demand  for  their  value  in  case  of  loss  by  perils  of  the  sea,  and  has  never 
been  construed  to  bear  upon  the  rights  of  the  parties  in  relation  to  the 
freight,  we  cannot  see  anything  in  that  instrument  which  can  affect  the 
question  before  us.  This  must  stand  upon  the  principles  of  marine  or 
mercantile  law,  so  far  as  they  may  have  been  recognized  and  adopted,  or 
may  be  found  agreeable  to  the  rules  and  maxims  of  the  common  law. 

It  is  certainly  a  clear  principle  of  the  common  law,  that  when  money  is 
paid  or  a  promise  made  by  one  part}'  in  contemplation  of  some  act  to  be  done 
by  the  other,  which  is  the  sole  consideration  of  the  payment  or  promise, 
and  the  thing  stipulated  to  be  done  is  not  performed,  the  money  may  be 
recovered  back,  or  the  promise  founded  on  such  consideration  may  be 
avoided  between  the  parties  to  the  contract.  This  general  principle  is  the 
foundation  of  perhaps  the  largest  class  of  cases  which  have  been  sustained 
under  the  action  for  money  had  and  received.  Exceptions  may  be  made 
by  a  stipulation  of  the  parties,  but  without  such  exceptions  the  rule  seems 
to  be  universal. 

And  this  broad  principle  of  justice  has  been  adopted  in  the  marine  law, 
in  relation  to  this  subject  of  freight,  upon  the  continent  of  Europe,  as  is 
very  fully  proved  by  the  researches  made  and  the  cases  cited  by  Chief 
Justice  Kent,  in  the  case  of  Watson  v.  Duykinck.^ 

It  would  be  but  an  affectation  of  learning  to  go  over  the  ground  wliich 
has  been  so  ably  preoccupied  in  the  opinion  given  in  that  case,  especially 
as  the  same  ground  has  been  traversed  by  Mr.  Justice  Story  in  a  note  in 
his  edition  of  Abbott  on  Merchant  Ships,  etc.,  which  note  was  avowedly  sup- 
plied from  the  opinion  of  Chief  Justice  Kent  above  cited.  I  wish  for  one, 
since  books  are  so  prodigiously  multiplied,  to  spai-e  the  profession  and  the 
public  the  expense  of  reiterated  citations  on  points  indubitably  settled,  when 
both  text  and  comment  may  be  found  in  almost  every  book  in  a  lawyei-'s 

1  3  Johns.  335. 


SECT.  II.]  GRIGGS   V.   AUSTIN.  539 

library.  It  is  sufiBcient  then  to  say,  that  by  rcfereuce  to  the  above-cited 
opinion  and  the  note  of  Mr.  Justice  Story,  it  will  be  found  to  be  the  estab- 
lished law  of  the  maritime  countries  on  the  continent  of  Europe,  that 
freight  is  the  compensation  for  the  carriage  of  goods,  and  if  it  be  paid  in 
advance,  and  the  goods  be  not  carried  by  reason  of  any  event  not  imputable 
to  the  shipper,  it  is  to  be  repaid,  unless  there  be  a  special  agreement  to  the 
contrary. 

The  commercial  principle  recognized  by  the  continental  nations  is  re- 
duced into  the  form  of  a  maxim  in  the  Napoleon  Code  de  Commerce,  tit.  8, 
art.  302.  "  No  freight  is  due  for  merchandise  lost  by  shipwreck  or  strand- 
ing, plundered  by  pirates  or  taken  by  enemies.  The  master  is  bound  to 
restore  freight  which  shall  have  been  advanced,  if  there  is  no  agreement 
to  the  contrary."  This,  like  most  of  the  provisions  in  the  modern  French 
codes,  is  not  the  introduction  of  a  new  principle,  but  the  new  promulga- 
tion of  antecedent  law  in  a  more  convenient  form,  as  was  the  case  with  the 
"Digest"  and  other  works  executed  under  the  auspices  of  Justinian,  of 
whom  the  emperor  Napoleon  was  in  this  respect  an  imitator. 

It  is  admitted  in  argument,  that  such  is  the  law  of  the  continental 
powers,  but  it  is  suggested  that  it  has  not  been  introduced  into  the  English 
law,  and,  therefore,  there  is  no  evidence  that  it  belongs  to  our  common  law. 
It  is  true  there  are  few  cases  in  the  English  books  touching  this  jwint, 
but  it  is  equally  true  that  the  principle  has  never  been  denied  there ;  on 
the  contrary,  in  the  case  cited  from  1  Campb.  Lord  Ellexborough,  who 
was  a  great  mercantile  judge,  recognizes  it  in  the  full  extent  of  the  Codo 
de  Commerce;  and  the  cases  cited  from  4  M.  &  S.,  2  and  4  B.  &  A.  and 
5  Taunt,  proceed  upon  the  ground  of  a  stipulation  in  the  seven\l  contracts 
which  were  under  discussion,  similar  to  the  exception  in  the  continental 
rule  above  cited  ;  and  the  obiter  remark  of  Mr.  Justice  Rayley,  in  the  case 
of  De  Silvale  v.  Kendall,  that  wherever  there  is  an  express  stipulation  that 
freight  shall  be  paid  in  advance,  there  must  be  an  express  stipulation  that 
it  shall  be  recovered  back  if  the  goods  be  not  carried,  if  such  be  the  inten- 
tion, will  be  found  not  to  militate  against  the  general  principle. 

A  distinction  was  raised  in  the  argument,  between  payment  of  freight 
and  an  advance  of  it,  it  being  supposed  to  be  recoverable  back  in  the  latter 
case,  but  not  in  the  former.  IJut  we  do  not  find  this  distinction  sujiportcd 
by  authorities,  nor  do  we  see  any  sound  reason  for  it.  \Vc  tliink  an  ad- 
vance of  freight  means  the  same  thing  as  payment  of  freight  beforehand  or 
in  advance,  and  whether  the  whole  is  paid  or  a  part  we  think  makes  no 
difference. 

In  the  English  cases  cited  a  very  nice  discrimination  has  been  adopted 
between  a  contract  for  freight,  which  includes  an  obligiition  to  transport 
and  deliver,  and  a  contract  to  receive  tlic  goods  on  bo;ird  the  vessel.  Tliat 
a  contract  of  the  latter  nature  niiiy  be  iimde,  s(»  that  it  will  be  considered 
aa  executed  by    the  n)ero  lading  of  the  goodn,  we  do  not  doul»t  ;  but  wo 


540  GRIGGS   V.   AUSTIN.  [CHAP.  IL 

cannot  think  that  such  a  contract  can  be  implied  from  the  mere  fact  of  the 
freight's  being  paid  down,  because  reasons  may  and  often  do  exist  for 
exacting  this,  without  any  intention  to  vary  the  legal  liabilities  of  the 
parties.  If  persons  apply  for  a  passage  in  a  vessel,  as  is  often  the  case  be- 
tween this  country  and  Great  Britain,  whose  responsibility  may  be  doubtful, 
and  they  are  received  on  boartl  at  the  customary  price  on  condition  of  ad- 
vancing the  passage-money,  and  the  vessel  should  be  wrecked  immediately 
ou  commencement  of  the  voyage,  so  that  the  passengers  would  have  to 
seek  another  vessel  and  pay  their  passage-money  again,  we  cannot  think 
that  the  master  or  shipowner  would  have  a  right  to  retain  the  money, 
unless  there  were  an  express  agi-eement  to  that  effect.  The  case  of  Watson 
V.  Duykinck  above  cited  is  somewhat  of  this  nature.  In  that  case  the 
voyage  was  broken  up  two  da}s  after  its  commencement,  and  tlie  passen- 
ger, instead  of  being  carried  to  the  island  of  St.  Thomas,  was  landed  in 
Connecticut.  He  however  was  not  allowed  to  recover  back  the  passage- 
money  which  had  been  paid  in  advance,  on  the  ground  that  the  considera- 
tiiju  was  an  agreement  on  the  part  of  the  master  to  suffer  him  to  proceed 
in  the  sloop,  etc.,  and  that  the  master  had  suffered  him  to  come  on  board, 
which  was  an  execution  of  the  contract.  I  confess  this  does  not  seem  to 
me  to  be  the  most  obvious  effect  of  the  contract ;  but  it  was  by  this  con- 
struction only  that  the  defendant  prevailed,  the  court  being  clear  that  were 
it  a  common  case  of  passage-money  paid  in  advance,  by  the  principles  of 
the  marine  law,  engrafted  into  the  common  law,  it  must  have  been  re- 
covered back.  The  same  principle  applies  with  equal  force  to  money  paid 
in  advance  for  the  freight  of  goods.  Such  payment  does  not  import  a 
relinquishment  of  any  right,  for  it  may  have  been  exacted  because  the 
goods  themselves  might  not  be  a  sufficient  security  for  the  freight,  aud  the 
owner  of  the  goods  might  not  be  responsible. 

The  case  before  us  is  likely  to  have  been  of  that  kind.  Fruit  was  the 
subject  of  the  contract ;  it  was  of  a  perishable  nature  and  liable  to  great 
uncertainty  as  to  its  value  in  a  foreign  market ;  the  owner  of  it  may  have 
been  a  person  of  no  property  ;  and  for  these  reasons  the  payment  down 
may  have  been  exacted. 

But  one  of  the  counsel  for  the  defendant  has  put  the  case  on  ground 
which  admits  the  general  principle  that  freight  may  be  recovered  back 
when  the  goods  are  not  delivered,  unless  there  be  an  agreement  to  the 
contrary,  but  he  insists  that  such  an  agreement  does  appear  from  the 
evidence,  that  is,  from  the  bill  of  lading  and  the  receipt  on  the  account. 
But  we  think  they  furnish  no  evidence  of  such  an  agreement ;  they  mei'ely 
prove  that  the  freight  was  paid  in  advance. 

Indeed  it  will  be  seen  at  once,  that  if  the  payment  of  freight  thus  proved 
were  to  be  construed  into  a  stipulation  that  it  should  not  be  recovered 
back,  the  whole  doctrine  of  the  marine  law  on  this  subject  would  be  use- 
less.    The  maxim  is,  that  freight  paid  in  advance,  if  the  goods  be  not 


SECT.  II.]  GRIGGS   V.   AUSTIN.  541 

carried,  shall  be  returned,  unless  there  be  a  stipulation  to  the  contrary. 
Now  if  the  mere  payment  proved  such  stipulation  there  would  be  no  case 
for  the  rule  to  operate  upon.  So  that  when  Mr.  Justice  Bayley  says,  that 
where  there  is  an  express  stipulation  to  pay  freight  in  advance,  there  must 
also  be  an  express  stipulation  to  pay  it  back  in  order  to  entitle  the  shipper 
to  recover,  he  means  something  more  than  the  mere  payment  of  the  freight, 
which  may  be  equivocal.  He  means  undoubtedly  an  express  stipulation  in 
the  contract,  because  it  might  be  inferred  from  such  a  stipulation  that  the 
parties  had  calculated  hazards,  and  that  an  equivalent  had  been  obtained 
in  some  form  for  the  advance  of  money  which  otlierwise  would  be  due  only 
on  a  contingency.  And  he  was  there  reasoning  upon  a  case  which  might 
fairly  sustain  such  an  argument. 

It  is  said  that  the  rate  of  exchange  between  this  country  and  Knglaud 
gave  an  advantage  to  the  plaintiffs  which  may  have  been  tlie  consideration 
for  paying  freight  in  advance.  That  fact  does  not  appear  in  the  report, 
and  if  it  did  it  could  not  affect  our  decision.  If  the  intent  of  the  parties 
had  been  submitted  to  the  jury,  as  was  done  by  Chief  Justice  Giuim  in  the 
case  citeei  from  5  Taunt.  435,  it  might  have  been  material,  but  we  do  not 
find  that  the  fact  was  offered  to  be  proved  at  the  trial,  so  that  we  do  not 
see  that  any  use  can  now  be  made  of  it. 

Judgment  fur  the  plaintiffs^ 

^  It  is  settled  by  the  authorities  referred  to  in  tlie  course  of  tlie  argiunent  that  by  tlie 
law  of  England  a  payment  made  in  advance  on  account  of  freight  canjiot  be  recoveivd 
back  tn  the  event  of  the  goods  being  lost,  and  the  freight  therefore  not  beiouiiiig  pay- 
able. I  regret  that  the  law  is  so.  I  think  it  founded  on  an  erroneous  principle  and 
anything  but  satisfactory  ;  and  I  am  emboldened  to  say  this  by  finding  tliat  the  Ameri- 
can authorities  have  settled  the  law  upon  directly  opposite  principles,  and  that  the 
law  of  every  European  country  is  in  conformity  to  the  American  doctrine  and  contrary 
to  ours.  —  CocKBUKN,  C.  J.,  iu  liyrue  v.  Sckillcr,  L.  K.  ti  Ex.  319,  32o.  —  En. 


END   OF   VOL.  I. 


^ 


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